“It is not in case you buy but when you sell that makes distinction is the successful 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 will have 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 generating residual income from rental yields regarding putting their cash staying with you. Based on the current market, I would advise that they keep a lookout for good investment property where prices have dropped an estimated 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 use the same page – we prefer to take advantage of the current low price and put our profit 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 high as $18 000 per annum which easily beats returns from fixed deposits additionally the outperforms dividend returns from stocks.
Even though prices of private properties have continued to increase despite the economic uncertainty, we can see that the effect of the cooling measures have lead to a slower rise in prices as compared to 2010.
Currently, we look at 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 lower prices and buyers’ unwillingness to commit with a higher charges.
2) Existing demand for properties exceeding supply due to owners being 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. They ought to not be excessively alarmed by a slowdown each morning property market as their assets will consistently benefit in time and increasing amount of 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 in other types of properties apart from the residential segment (such as New Launches & Resales), they might also consider buying shophouses which likewise support generate passive income; that are not at the mercy of 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’. Never be required to sell household (and develop a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and it’s sell only during an uptrend.