“It is not when you buy but when you sell that makes learn 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 with the 4-year Seller’s Stamp Duty (SSD) that they will want 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 boon by entering the property market and generating passive income from rental yields associated with putting their cash secured. Based on the current market, I would advise they keep a lookout for any good investment property where prices have dropped very 10% rather than putting it in a fixed deposit which pays two.5% and does not hedge against inflation which currently stands at some.7%.
In this aspect, my investors and I take any presctiption the same page – we prefer to make the most of the current low rate 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 to an annual passive income of 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 rise despite the economic uncertainty, we can easily see that the effect of the cooling measures have cause a slower rise in prices as compared to 2010.
Currently, we look at that although property prices are holding up, sales are starting to stagnate. I’m going to attribute this into the following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive prices and buyers’ unwillingness to commit to some higher price.
2) Existing demand for properties 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. Really should not be excessively alarmed by a slowdown in the property market as their assets will consistently benefit in the long run and increasing amount of value as a result of following:
a) Good governance in Singapore
b) Land jade scape scarcity in Singapore, and,
c) Inflation which will place and upward pressure on prices
For buyers who would like invest consist of types of properties besides the residential segment (such as New Launches & Resales), they might also consider investing in shophouses which likewise can help generate passive income; and therefore not controlled by the recent government cooling measures like the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the value of having ‘holding power’. You shouldn’t be required to sell household (and make a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and require to sell only during an uptrend.