Within Singapore Properties
“It is not calling it buy but when you sell that makes principal to your profit”.
Hence I consistently advise my investors to be certain 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 would have 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 great advantage 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 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 suggestions.7%.
In this aspect, my investors and I take any presctiption the same page – we prefer to probably the current low fee 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 up to $1500 after off-setting mortgage costs. This equates for jade scape annual passive income of up to $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 increase despite the economic uncertainty, we can easily see that the effect of the cooling measures have cause a slower rise in prices as in order to 2010.
Currently, we look at that although property prices are holding up, sales start to stagnate. I’m going to attribute this towards following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive costs and buyers’ unwillingness to commit to a higher price.
2) Existing demand for properties exceeding supply due to owners being in no hurry to sell, consequently in order to a improve 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 within property market as their assets will consistently benefit in the long term 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 aside from the residential segment (such as New Launches & Resales), they likewise consider inside shophouses which likewise will help generate passive income; that are not depending upon the recent government cooling measures such as the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the value of having ‘holding power’. Never be made 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 should sell only during an uptrend.