“It is not when you buy but when you sell that makes principal to your profit”.
Hence I consistently advise my investors to guantee that 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 residual income from rental yields instead of putting their cash secured. Based on the current market, I would advise that they keep a lookout regarding any 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 5.7%.
In this aspect, my investors and I take presctiption the same page – we prefer to make the most of the current low rate 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 as many as $1500 after off-setting mortgage costs. This equates a good annual passive income 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 increase despite the economic uncertainty, we notice that the effect of the cooling measures have caused a slower rise in prices as the actual 2010.
Currently, we cane easily see that although property prices are holding up, sales start to stagnate. Let me attribute this towards following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive costs and buyers’ unwillingness to commit to a higher promoting.
2) Existing demand for jade scape properties exceeding supply due to owners finding yourself in no hurry to sell, consequently resulting in a increase prices.
I would advise investors to view their Singapore property assets as long-term investments. Will need to not be excessively alarmed by a slowdown each morning property market as their assets will consistently benefit in the long run and increase in value as a result of 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 purchasing shophouses which likewise might help generate passive income; and thus not controlled by the recent government cooling measures a lot 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the need for having ‘holding power’. You must never be required to sell house (and make 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.