Committing to Singapore Properties
“It is not calling it buy but when you sell that makes distinction is the successful 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 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 great advantage by entering the property market and generating residual income from rental yields compared to putting their cash secured. Based on the current market, I would advise these people 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 5.7%.
In this aspect, my investors and I take presctiption the same page – we prefer to probably the current low pace and put our money 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 a good annual passive income as much as $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 elevate despite the economic uncertainty, we could see that the effect of the cooling measures have cause a slower rise in prices as when compared with 2010.
Currently, we look at that although property prices are holding up, sales start to stagnate. Let me attribute this for the following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive prices and buyers’ unwillingness to commit with a higher price.
2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently resulting in a rise in prices.
I would advise investors to view their jade scape singapore property assets as long-term investments. Dealerships will have not be excessively alarmed by a slowdown your market property market as their assets will consistently benefit in time 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 buyers who would like invest various other types of properties apart from the residential segment (such as New Launches & Resales), they might also consider buying shophouses which likewise can help generate passive income; are usually 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 importance of having ‘holding power’. You shouldn’t ever be forced to sell household (and develop a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and you should sell only during an uptrend.