“It is not when you buy but when you sell that makes the gap to your profit”.
Hence I consistently advise my investors to be sure they have gone through their financial plans thoroughly as they will be entering into a 4-year commitment – after for the 4-year Seller’s Stamp Duty (SSD) that they will need to pay if they sell their property before 4 years.
Once they have determined the amount of finances they are willing to outlay, they will set themselves at a great advantage by entering the property market and jade scape generating second income from rental yields compared to putting their cash in the bank. Based on the current market, I would advise these people keep a lookout regarding any good investment property where prices have dropped a great deal more 10% rather than putting it in a fixed deposit which pays .5% and does not hedge against inflation which currently stands at some.7%.
In this aspect, my investors and I take presctiption the same page – we prefer to make the most of the current low pace and put our money in property assets to produce a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of as high as $1500 after off-setting mortgage costs. This equates for annual passive income all the way to $18 000 per annum which easily beats returns from fixed deposits plus outperforms dividend returns from stocks.
Even though prices of private properties have continued to increase despite the economic uncertainty, we can easily see that the effect of the cooling measures have cause a slower rise in prices as in order to 2010.
Currently, we look at that although property prices are holding up, sales start to stagnate. I’m going to attribute this on the following 2 reasons:
1) Many owners’ unwillingness to sell at more affordable prices and buyers’ unwillingness to commit with a higher price.
2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently in order to a rise in prices.
I would advise investors to view their Singapore property assets as long-term investments. They should not be excessively alarmed by a slowdown within property market as their assets will consistently benefit in the long run and boost in value because of the following:
a) Good governance in Singapore
b) Land scarcity in Singapore, and,
c) Inflation which will set and upward pressure on prices
For buyers who would like invest in other types of properties apart from the residential segment (such as New Launches & Resales), they likewise consider investing in shophouses which likewise will help generate passive income; are usually not prone to the recent government cooling measures a lot 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the need for having ‘holding power’. You shouldn’t ever be forced to sell your house (and create a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and require to sell only during an uptrend.