“It is not when you buy but when you sell that makes the gap to your profit”.
Hence I consistently advise my investors to guantee 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 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 boon by entering the property market and generating a second income from rental yields compared to putting their cash on your bottom line. Based on the current market, I would advise they keep a lookout for good investment property where prices have dropped more than 10% rather than putting it in a fixed deposit which pays three.5% and does not hedge against inflation which currently stands at ideas.7%.
In this aspect, my investors and I take any presctiption the same page – we prefer to probably the current low price and put our make the most 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 high as $1500 after off-setting mortgage costs. This equates to an annual passive income as much 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 elevate despite the economic uncertainty, we can see that the effect of the cooling measures have result in a slower rise in prices as in comparison to 2010.
Currently, we are able to access 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 a higher charges.
2) Existing demand unaltered data exceeding supply due to owners being in no hurry to sell, consequently in order to a embrace 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 associated with property market as their assets will consistently benefit in the longer term and increasing amount of value due to the following:
a) Good governance in Singapore
b) Land scarcity in Singapore, and,
c) Inflation which will place and upward pressure on prices
For buyers who would like invest some other types of properties in addition to the residential segment (such as New Launches & Resales), they likewise consider investing in shophouses which likewise support 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 must never be expected to sell your property (and develop 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.