Investing in Singapore Properties
“It is not when you buy but when you sell that makes principal to your profit”.
Hence I consistently advise my investors to ensure 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 advantage by entering the property market and generating residual income from rental yields regarding putting their cash in the bank. Based on the current market, I would advise that they keep a lookout for good investment property where prices have dropped an estimated 10% rather than putting it in a fixed deposit which pays .5% and does not hedge against inflation which currently stands at simple.7%.
In this aspect, my investors and I use the same page – we prefer to take advantage of the current low fee 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 up to $1500 after off-setting mortgage costs. This equates to an annual passive income as high 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 increase 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 look at that although property prices are holding up, sales start to stagnate. Let me attribute this into the following 2 reasons:
1) Many owners’ unwillingness to sell at more affordable prices and buyers’ unwillingness to commit with a higher the price tag.
2) Existing demand unaltered data exceeding supply due to owners being in no hurry to sell, consequently in order to a increase prices.
I would advise investors to view their 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 the long term and trend of value as a result of following:
a) Good governance in Singapore
b) Land scarcity in jade scape singapore, and,
c) Inflation which will place and upward pressure on prices
For clients who would like invest consist of types of properties apart from the residential segment (such as New Launches & Resales), they could also consider buying shophouses which likewise might help generate passive income; are usually not prone to the recent government cooling measures similar to the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the value of having ‘holding power’. Never be forced to sell household (and develop a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and it’s sell only during an uptrend.