“It is not an individual have buy but when you sell that makes distinction is the successful to your profit”.
Hence I consistently advise my investors to be sure 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 must 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 advantage by entering the property market and generating residual income from rental yields regarding putting their cash staying with you. Based on the current market, I would advise may keep a lookout for good investment property where prices have dropped a great deal more 10% rather than putting it in a fixed deposit which pays three.5% and does not hedge against inflation which currently stands at some.7%.
In this aspect, jade scape my investors and I use the same page – we prefer to take advantage of the current low price and put our take advantage property assets to generate 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 to an annual passive income as much 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 rise despite the economic uncertainty, we notice that the effect of the cooling measures have caused a slower rise in prices as in comparison to 2010.
Currently, we observe that although property prices are holding up, sales are starting to stagnate. I will attribute this to the following 2 reasons:
1) Many owners’ unwillingness to sell at lower prices and buyers’ unwillingness to commit together with higher price.
2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently leading to a embrace 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 within property market as their assets will consistently benefit in over time and increased value due to 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 various other types of properties apart from the residential segment (such as New Launches & Resales), they likewise consider buying shophouses which likewise will help generate passive income; that are not prone to the recent government cooling measures like the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the importance of having ‘holding power’. You shouldn’t ever be required to sell your house (and develop a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and really sell only during an uptrend.