“It is not in case you buy but when you sell that makes principal 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 for the 4-year Seller’s Stamp Duty (SSD) that they will 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 boon by entering the property market and generating residual income from rental yields instead of putting their cash staying with you. Based on the current market, I would advise may keep a lookout for good investment property where prices have dropped upwards of 10% rather than putting it in a fixed deposit which pays 4.5% and does not hedge against inflation which currently stands at simple.7%.
In this aspect, my investors and I take any presctiption the same page – we prefer to take advantage of the current low rate and put our money 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 high as $1500 after off-setting mortgage costs. This equates to an annual passive income all the way 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 despite the economic uncertainty, we could see that the effect of the cooling measures have can lead to a slower rise in prices as when compared with 2010.
Currently, we observe that although property prices are holding up, sales start to stagnate. I’m going to attribute this on the following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive prices and buyers’ unwillingness to commit together with higher the price tag.
2) Existing demand for properties exceeding supply due to owners being in no hurry to sell, consequently resulting in a enhance prices.
I would advise investors to view their jade scape singapore property assets as long-term investments. They should not be excessively alarmed by a slowdown each morning property market as their assets will consistently benefit in the long run and boost in value due to 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 various other types of properties besides the residential segment (such as New Launches & Resales), they might also consider investing in 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 residential properties.
I cannot help but stress the need for having ‘holding power’. You should never be expected to sell your house (and make 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.