“It is not when you buy but when you sell that makes the gap to your profit”.
Hence I consistently advise my investors to ensure that 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 have to pay if they sell their property before four 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 generating residual income from rental yields compared to putting their cash staying with you. Based on the current market, I would advise they keep a lookout for any good investment property where prices have dropped more than 10% rather than putting it in a fixed deposit which pays 4.5% and does not hedge against inflation which currently stands at simple.7%.
In this aspect, my investors and I take presctiption the same page – we prefer to take advantage of the current low fee and put our benefit property assets to produce a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of up to $1500 after off-setting mortgage costs. This equates to an annual passive income of up to $18 000 per annum which easily beats returns from fixed deposits and also outperforms dividend returns from stocks.
Even though prices of private properties have continued to increase despite the economic uncertainty, we could see that the effect of the cooling measures have result in a slower rise in prices as in comparison to 2010.
Currently, we observe that although property prices are holding up, sales start to stagnate. Let me attribute this to the following 2 reasons:
1) Many owners’ unwillingness to sell at affordable prices and buyers’ unwillingness to commit to a higher charges.
2) Existing demand unaltered data exceeding supply due to owners finding yourself in no hurry to sell, consequently resulting in a improve prices.
I would advise investors to view their Singapore property assets as long-term investments. Dealerships will have not be excessively alarmed by a slowdown each morning property market as their assets will consistently benefit in the longer term and increase in value because of the following:
a) Good governance in Singapore
b) Land scarcity in jade scape singapore, and,
c) Inflation which will set and upward pressure on prices
For clients who would like invest some other types of properties besides the residential segment (such as New Launches & Resales), they likewise consider inside shophouses which likewise can help generate passive income; and thus not controlled by the recent government cooling measures such as the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the importance of having ‘holding power’. You should never be made to sell house (and make a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and you will need to sell only during an uptrend.