Within Singapore Properties
“It is not when you buy but when you sell that makes the difference 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 taking into consideration 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 advantage 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 will 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 three.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 probably the current low rate and put our profit in property assets to generate 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 with regard to an annual passive income of up to $18 000 per annum which easily beats returns from fixed deposits as well outperforms dividend returns from stocks.
Even though prices of private properties have continued to go up despite the economic uncertainty, we could see that the effect of the cooling measures have lead to a slower rise in prices as when compared with 2010.
Currently, we cane easily see 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 less expensive costs and buyers’ unwillingness to commit together with higher charges.
2) Existing demand unaltered data 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 Singapore property assets as long-term investments. They should not be excessively alarmed by a slowdown within property market as their assets will consistently benefit in over time and jade scape trend 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 aside from the residential segment (such as New Launches & Resales), they furthermore consider throughout shophouses which likewise might help generate passive income; and are not subject to the recent government cooling measures similar to the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the significance of having ‘holding power’. You should never be expected to sell your stuff (and make a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and you will need to sell only during an uptrend.