“It is not when you buy but when you sell that makes the difference to your profit”.
Hence I consistently advise my investors to be certain 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 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 a second income from rental yields compared to putting their cash secured. Based on the current market, I would advise 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 4.5% and does not hedge against inflation which currently stands at some.7%.
In this aspect, my investors and I use the same page – we prefer to reap the benefits the current low rate and put our make the most property assets to generate a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of of up to $1500 after off-setting mortgage costs. This equates for annual passive income as much as $18 000 per annum which easily beats returns from fixed deposits furthermore outperforms dividend returns from stocks.
Even though prices of private properties have continued to elevate despite the economic uncertainty, we are able to access that the effect of the cooling measures have can lead to a slower rise in prices as in order to 2010.
Currently, we look at that although property prices are holding up, sales are beginning to stagnate. I will attribute this towards following 2 reasons:
1) Many owners’ unwillingness to sell at more affordable prices and buyers’ unwillingness to commit to some higher price.
2) Existing demand unaltered data exceeding supply due to owners being in no hurry to sell, consequently leading to a improve prices.
I would advise investors to view their Singapore property assets as long-term investments. Really should not be excessively alarmed by a slowdown your market property market as their assets will consistently benefit in over time and trend of value because of 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 various other types of properties aside from the residential segment (such as New Launches & Resales), they likewise consider investing in shophouses which likewise will help generate passive income; and therefore not subject to the recent government cooling measures like the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the need for jade scape having ‘holding power’. Never be required to sell your stuff (and make a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and really sell only during an uptrend.