“It is not when you buy but when you sell that makes principal 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 with 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 boon by entering the property market and generating passive income from rental yields compared to putting their cash staying with you. Based on the current market, I would advise may keep a lookout for good investment property where prices have dropped an estimated 10% rather than putting it in a fixed deposit which pays .5% and does not hedge against inflation which currently stands at 5.7%.
In this aspect, my investors and I take prescription the same page – we prefer to probably the current low price and put our money in 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 a good annual passive income of up to $18 000 per annum which easily beats returns from fixed deposits furthermore 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 cause a slower rise in prices as compared to 2010.
Currently, we observe that although property prices are holding up, sales are starting to stagnate. Let me attribute this into the following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive prices and buyers’ unwillingness to commit together with higher the price tag.
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. Dealerships will have not be excessively alarmed by a slowdown associated with property market as their assets will consistently benefit in time and trend of value as a result of 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 various other types of properties apart from the residential segment (such as New Launches & Resales), they may also consider throughout shophouses which likewise might help generate passive income; and thus not depending upon the recent government cooling measures prefer the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the significance of having ‘holding power’. You shouldn’t ever be expected to sell your house (and create 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.