“It is not an individual have 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 with 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 boon by entering the property market and generating passive income from rental yields compared to putting their cash secured. Based on the current market, I would advise may keep a lookout for good investment property where prices have dropped very 10% rather than putting it in a fixed deposit which pays .5% and does not hedge against inflation which currently stands at some.7%.
In this aspect, my investors and I take any presctiption the same page – we prefer to reap the benefits of the current low price and put our take advantage 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 high 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 additionally the outperforms dividend returns from stocks.
Even though prices of private properties have continued to go up despite the economic uncertainty, we notice that the effect of the cooling measures have cause a slower rise in prices as in comparison to 2010.
Currently, we look at that although property prices are holding up, sales are beginning to stagnate. I am going to attribute this to the following 2 reasons:
1) Many owners’ unwillingness to sell at more affordable prices and buyers’ unwillingness to commit to some higher charges.
2) Existing demand for properties 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 ought to not be excessively alarmed by a slowdown within property market as their assets will consistently benefit in the long run and boost in value because of the following:
a) Good governance in Singapore
b) Land scarcity in Singapore, jade scape and,
c) Inflation which will set and upward pressure on prices
For buyers who would like invest consist of types of properties apart from the residential segment (such as New Launches & Resales), they likewise consider buying shophouses which likewise assist generate passive income; and thus not subject to the recent government cooling measures such as the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the value of having ‘holding power’. You should never be made to sell your stuff (and make a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and you will need to sell only during an uptrend.