Within Singapore Properties
“It is not calling it 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 must 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 great advantage by entering the property market and generating second income from rental yields associated with putting their cash in the bank. Based on the current market, I would advise they will keep a lookout any kind of 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 some.7%.
In this aspect, my investors and I use the same page – we prefer to reap the benefits the current low rate 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 with regard to an annual passive income as high as $18 000 per annum which easily beats returns from fixed deposits as well outperforms dividend returns from stocks.
Even though prices of private properties have continued to despite the economic uncertainty, we could see that the effect of the cooling measures have cause a slower rise in prices as compared to 2010.
Currently, we can see that although property prices are holding up, sales are beginning to stagnate. Let me attribute this for the following 2 reasons:
1) Many owners’ unwillingness to sell at lower prices and buyers’ unwillingness to commit to a higher value tag.
2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently resulting in a improve 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 over time and boost in value as a result of following:
a) Good governance in Singapore
b) Land scarcity in jade scape singapore, and,
c) Inflation which will place and upward pressure on prices
For clients who would like invest some other types of properties in addition to the residential segment (such as New Launches & Resales), they could also consider purchasing shophouses which likewise assist generate passive income; are usually not at the mercy of the recent government cooling measures like the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the importance of having ‘holding power’. You must never be forced to sell household (and create a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and really sell only during an uptrend.
