“It is not an individual have buy but when you sell that makes the gap 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 would have 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 residual income from rental yields rather than 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 a great deal more 10% rather than putting it in a fixed deposit which pays 4.5% and does not hedge against inflation which currently stands at some.7%.
In this aspect, my investors and I take prescription the same page – we prefer to reap the benefits of the current low price and put our money 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 many as $1500 after off-setting mortgage costs. This equates a good annual passive income all the way to $18 000 per annum which easily beats returns from fixed deposits plus outperforms dividend returns from stocks.
Even though prices of private properties have continued to despite the economic uncertainty, we are able to access that the effect of the cooling measures have cause a slower rise in prices as in order to 2010.
Currently, we look at that although property prices are holding up, sales are beginning to stagnate. I’m going to attribute this into the following 2 reasons:
1) Many owners’ unwillingness to sell at more affordable prices and buyers’ unwillingness to commit with a higher charges.
2) Existing demand unaltered data exceeding supply due to owners finding yourself in no hurry to sell, consequently leading to a improve 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 associated with property market as their assets will consistently benefit in time and increasing amount of 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 jade scape buyers who would like invest in other types of properties aside from the residential segment (such as New Launches & Resales), they furthermore consider buying shophouses which likewise might help generate passive income; and thus not depending upon the recent government cooling measures such as the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the need for having ‘holding power’. You must never be forced to sell your stuff (and make a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and require to sell only during an uptrend.