“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 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 gift by entering the property market and generating passive income from rental yields rather than putting their cash on your bottom line. Based on the current market, jade scape I would advise may keep a lookout for 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 prescription the same page – we prefer to probably the current low price and put our make the most property assets to generate 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 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 increase despite the economic uncertainty, we can easily see that the effect of the cooling measures have cause a slower rise in prices as when compared with 2010.
Currently, we can see that although property prices are holding up, sales are starting to stagnate. Let me attribute this on the following 2 reasons:
1) Many owners’ unwillingness to sell at lower prices and buyers’ unwillingness to commit with a higher value tag.
2) Existing demand unaltered data exceeding supply due to owners finding yourself in no hurry to sell, consequently resulting in a improve prices.
I would advise investors to view their Singapore property assets as long-term investments. Really should not be excessively alarmed by a slowdown within property market as their assets will consistently benefit in over time and increasing amount of value due to 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 some other types of properties aside from the residential segment (such as New Launches & Resales), they might also consider inside shophouses which likewise assist generate passive income; and therefore not subject to the recent government cooling measures like the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the significance of having ‘holding power’. You shouldn’t ever be required to sell your house (and develop 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.