“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 want 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 advantage by entering the property market and generating a second income from rental yields compared to putting their cash in the bank. Based on the current market, I would advise that they keep a lookout any kind of good investment property where prices have dropped upwards of 10% rather than putting it in a fixed deposit which pays three.5% and does not hedge against inflation which currently stands at ideas.7%.
In this aspect, my investors and I take any presctiption the same page – we prefer to reap the benefits the current low interest rate and put our make the most property assets to generate 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 for annual passive income of up 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 elevate despite the economic uncertainty, we notice that the effect of the cooling measures have result in a slower rise in prices as compared to 2010.
Currently, we observe that although property prices are holding up, sales are beginning to stagnate. I’m going to attribute this towards following 2 reasons:
1) Many owners’ unwillingness to sell at more affordable prices and buyers’ unwillingness to commit to some higher promoting.
2) Existing demand for properties exceeding supply due to owners being in no hurry to sell, consequently leading to a enhance 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 within property market as their assets will consistently benefit in the long term and increased value as a result of following:
a) Good governance in jade scape singapore
b) Land scarcity in Singapore, and,
c) Inflation which will set and upward pressure on prices
For clients who would like invest consist of types of properties besides the residential segment (such as New Launches & Resales), they could also consider purchasing shophouses which likewise can help generate passive income; and therefore not controlled by the recent government cooling measures such as the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the importance of having ‘holding power’. You should never be expected to sell your house (and make a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and you should sell only during an uptrend.