“It is not when 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 taking into consideration the 4-year Seller’s Stamp Duty (SSD) that they will need 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 gift by entering the property market and generating a second 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 any good investment property where prices have dropped upwards of 10% rather than putting it in a fixed deposit which pays 0.5% and does not hedge against inflation which currently stands at some.7%.
In this aspect, my investors and I use the same page – we prefer to reap the benefits 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 many as $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 and also outperforms dividend returns from stocks.
Even though prices of private properties have continued to rise despite the economic uncertainty, we could see that the effect of the cooling measures have can lead to a slower rise in prices as in order to 2010.
Currently, we are able to access that although property prices are holding up, sales are beginning to stagnate. I am going to attribute this for the following 2 reasons:
1) Many owners’ unwillingness to sell at more affordable prices and jade scape buyers’ unwillingness to commit with a higher the price tag.
2) Existing demand unaltered data exceeding supply due to owners finding yourself 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 should not be excessively alarmed by a slowdown each morning property market as their assets will consistently benefit in over time and increasing amount of value because of the following:
a) Good governance in Singapore
b) Land scarcity in Singapore, and,
c) Inflation which will set and upward pressure on prices
For clients who would like invest some other types of properties apart from the residential segment (such as New Launches & Resales), they likewise consider investing in shophouses which likewise can help generate passive income; are usually not controlled by the recent government cooling measures like the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the significance of having ‘holding power’. You should never be instructed to sell your property (and develop a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and you will need to sell only during an uptrend.