“It is not in case you buy but when you sell that makes principal 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 will need 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 advantage by entering the property market and generating second income from rental yields regarding putting their cash in the bank. Based on the current market, I would advise these people 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 suggestions.7%.
In this aspect, my investors and I use the same page – we prefer to make the most of the current low pace and jade scape 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 a whole lot $1500 after off-setting mortgage costs. This equates with regard to an annual passive income as high as $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 notice that the effect of the cooling measures have lead to a slower rise in prices as when compared with 2010.
Currently, we look at that although property prices are holding up, sales start to stagnate. I am going to attribute this for the following 2 reasons:
1) Many owners’ unwillingness to sell at affordable prices and buyers’ unwillingness to commit into 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 rise in prices.
I would advise investors to view their Singapore property assets as long-term investments. They ought to not be excessively alarmed by a slowdown each morning property market as their assets will consistently benefit in time and boost in value because of the following:
a) Good governance in Singapore
b) Land scarcity in Singapore, and,
c) Inflation which will set and upward pressure on prices
For clients who would like invest in other types of properties besides the residential segment (such as New Launches & Resales), they furthermore consider investing in shophouses which likewise support generate passive income; that are 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 having ‘holding power’. You must never be instructed to sell your house (and develop a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and you will need to sell only during an uptrend.