“It is not in case you buy but when you sell that makes the gap to your profit”.
Hence I consistently advise my investors to take care that they have gone through their financial plans thoroughly as they will be entering into a 4-year commitment – after taking into consideration the 4-year Seller’s Stamp Duty (SSD) that they must 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 gift by entering the property market and generating a second income from rental yields regarding putting their cash in the bank. Based on the current market, I would advise may keep a lookout any kind of good investment property where prices have dropped very 10% rather than putting it in a fixed deposit which pays three.5% and does not hedge against inflation which currently stands at 5.7%.
In this aspect, my investors and I take any presctiption the same page – we prefer to reap the benefits the current low pace and put our money in property assets to generate 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 to an annual passive income as much as $18 000 per annum which easily beats returns from fixed deposits as well outperforms dividend returns from stocks.
Even though prices of private properties have continued to go up despite the economic uncertainty, we could see that the effect of the cooling measures have result in a slower rise in prices as the actual 2010.
Currently, we cane easily see that although property prices are holding up, sales are starting to stagnate. I’m going to attribute this towards following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive costs and buyers’ unwillingness to commit into a higher value tag.
2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently leading to a increase prices.
I would advise investors to view their Singapore property assets as long-term investments. They ought to not be excessively alarmed by a slowdown in the property market as their assets will consistently benefit in over time and boost in value as a result of following:
a) Good governance in jade scape singapore
b) Land scarcity in Singapore, and,
c) Inflation which will place 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 may also consider buying shophouses which likewise might help generate passive income; and are not depending upon the recent government cooling measures such as the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the significance of having ‘holding power’. Never be expected to sell house (and create a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and really sell only during an uptrend.