“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 certain 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 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 second income from rental yields associated with putting their cash secured. Based on the current market, I would advise they will keep a lookout for good investment property where prices have dropped more than 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 are on the same page – we prefer to reap the benefits the current low pace 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 a whole lot $1500 after off-setting mortgage costs. This equates with regard 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 are able to access that the effect of the cooling measures have lead to a slower rise in prices as when compared with 2010.
Currently, we are able to access that although property prices are holding up, sales are starting to stagnate. I am going to attribute this to the following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive costs and jade scape buyers’ unwillingness to commit to some higher the price tag.
2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently resulting in a enhance prices.
I would advise investors to view their Singapore property assets as long-term investments. Really should not be excessively alarmed by a slowdown in the property market as their assets will consistently benefit in the longer term and trend of value as a result of 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 various other types of properties besides the residential segment (such as New Launches & Resales), they likewise consider purchasing shophouses which likewise support generate passive income; and are not controlled by the recent government cooling measures similar to the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the need for having ‘holding power’. You should never be made to sell your house (and develop a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and it’s sell only during an uptrend.