“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 will 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 instead of putting their cash staying with you. Based on the current market, I would advise these people keep a lookout regarding any good investment property where prices have dropped very 10% rather than putting it in a fixed deposit which pays .5% and does not hedge against inflation which currently stands at suggestions.7%.
In this aspect, my investors and I take presctiption the same page – we prefer to take advantage of the current low fee and put our profit 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 high as $1500 after off-setting mortgage costs. This equates with regard to an annual passive income up to $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 despite the economic uncertainty, we can see that the effect of the cooling measures have lead to a slower rise in prices as in order to 2010.
Currently, we observe that although property prices are holding up, sales are starting to stagnate. I’m going to attribute this for the following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive prices and buyers’ unwillingness to commit to a higher the price tag.
2) Existing demand unaltered data exceeding supply due to owners being in no hurry to sell, consequently leading to a enhance prices.
I would advise investors to view their Singapore property assets as long-term investments. They should not be excessively alarmed by a slowdown your market property market as their assets will consistently benefit in the longer term 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 some 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 thus not prone to the recent government cooling measures such as the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the need for having ‘holding power’. You shouldn’t ever be forced to sell household (and create a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and jade scape you will need to sell only during an uptrend.