“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 with the 4-year Seller’s Stamp Duty (SSD) that they will want 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 gift by entering the property market and generating residual income from rental yields rather than putting their cash secured. Based on the current market, I would advise they keep a lookout any kind of good investment property where prices have dropped very 10% rather than putting it in a fixed deposit which pays 0.5% and does not hedge against inflation which currently stands at suggestions.7%.
In this aspect, my investors and I are on the same page – we prefer to take advantage of the current low fee and put our benefit property assets to produce a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of a whole lot $1500 after off-setting mortgage costs. This equates a good annual passive income up to $18 000 per annum which easily beats returns from fixed deposits and also outperforms dividend returns from stocks.
Even though prices of private properties have continued to elevate despite the economic uncertainty, we notice that the effect of the cooling measures have lead to a slower rise in prices as compared to 2010.
Currently, we look at that although property prices are holding up, sales are beginning to stagnate. Let me attribute this towards following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive costs and buyers’ unwillingness to commit together with higher value tag.
2) Existing demand for properties exceeding supply due to owners being in no hurry to sell, consequently resulting in a increase prices.
I would advise investors to view their Singapore property assets as long-term investments. Really should not be excessively alarmed by a slowdown each morning property market as their assets will consistently benefit in the long term and boost in value due to the following:
a) Good governance in Singapore
b) Land scarcity in jade scape singapore, and,
c) Inflation which will set and upward pressure on prices
For buyers who would like invest in other types of properties aside from the residential segment (such as New Launches & Resales), they likewise consider purchasing shophouses which likewise can help generate passive income; that are not at the mercy of the recent government cooling measures like the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the importance of having ‘holding power’. You shouldn’t be required to sell household (and make a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and really sell only during an uptrend.