“It is not when you buy but when you sell that makes the difference 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 with 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 boon 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 keep a lookout any kind of 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 5.7%.
In this aspect, my investors and I take any presctiption the same page – we prefer to make the most of the current low price and put our profit in property assets to produce 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 of up to $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 go up despite the economic uncertainty, we can see that the effect of the cooling measures have can lead to a slower rise in prices as compared to 2010.
Currently, we cane easily see that although property prices are holding up, sales start to stagnate. I am going to attribute this on the following 2 reasons:
1) Many owners’ unwillingness to sell at lower prices and buyers’ unwillingness to commit to some higher charges.
2) Existing demand for properties exceeding supply due to owners being in no hurry to sell, consequently leading to a rise in prices.
I would advise investors to view their Singapore property assets as long-term investments. Really should not be excessively alarmed by a slowdown your market property market as their assets will consistently benefit in time and boost in value as a result of following:
a) Good governance in jade scape singapore
b) Land scarcity in Singapore, and,
c) Inflation which will place and upward pressure on prices
For clients who would like invest various other types of properties aside from the residential segment (such as New Launches & Resales), they may also consider purchasing shophouses which likewise can help generate passive income; are usually not controlled by the recent government cooling measures prefer the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the significance of having ‘holding power’. You must never be required 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.