Investing in Singapore Properties
“It is not when you buy but when you sell that makes the gap to your profit”.
Hence I consistently advise my investors to take care that 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 would 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 compared to putting their cash secured. Based on the current market, I would advise they will keep a lookout for jade scape good investment property where prices have dropped more than 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 take presctiption the same page – we prefer to take advantage of the current low pace and put our take advantage property assets to produce a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of of up to $1500 after off-setting mortgage costs. This equates a good annual passive income as high as $18 000 per annum which easily beats returns from fixed deposits plus outperforms dividend returns from stocks.
Even though prices of private properties have continued to go up despite the economic uncertainty, we are able to access that the effect of the cooling measures have can lead to a slower rise in prices as in order to 2010.
Currently, we cane easily see that although property prices are holding up, sales are starting to stagnate. I will attribute this on the following 2 reasons:
1) Many owners’ unwillingness to sell at lower prices and buyers’ unwillingness to commit to some higher promoting.
2) Existing demand unaltered data exceeding supply due to owners finding yourself in no hurry to sell, consequently resulting in a embrace prices.
I would advise investors to view their Singapore property assets as long-term investments. They should not be excessively alarmed by a slowdown your market 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 set and upward pressure on prices
For buyers who would like invest various other types of properties in addition to the residential segment (such as New Launches & Resales), they likewise consider buying shophouses which likewise support generate passive income; and thus not at the mercy of the recent government cooling measures prefer the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the importance of having ‘holding power’. You shouldn’t ever be forced to sell your property (and develop 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.
