“It is not in case you buy but when you sell that makes principal to your profit”.
Hence I consistently advise my investors to be sure 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 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 great advantage by entering the property market and generating residual income from rental yields regarding putting their cash on your bottom line. Based on the current market, I would advise they keep a lookout for any good investment property where prices have dropped upwards of 10% rather than putting it in a fixed deposit which pays two.5% and does not hedge against inflation which currently stands at 5.7%.
In this aspect, my investors and I use the same page – we prefer to reap the benefits of 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 a whole lot $1500 after off-setting mortgage costs. This equates for annual passive income up to $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 rise despite the economic uncertainty, we are able to access that the effect of the cooling measures have result in a slower rise in prices as when compared with 2010.
Currently, we observe that although property prices are holding up, sales start to stagnate. I will attribute this to the following 2 reasons:
1) Many owners’ unwillingness to sell at affordable prices 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 in order to a enhance 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 in the property market as their assets will consistently benefit in time and increased value because of the following:
a) Good governance in Singapore
b) Land scarcity in Singapore, and,
c) Inflation which will place and upward pressure on prices
For jade scape buyers who would like invest in other types of properties apart from the residential segment (such as New Launches & Resales), they might also consider throughout shophouses which likewise can help generate passive income; and thus not depending upon the recent government cooling measures like the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the need for having ‘holding power’. You should never be required 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.