“It is not when you buy but when you sell that makes the gap 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 need 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 advantage by entering the property market and generating second income from rental yields instead of putting their cash in the bank. Based on the current market, I would advise these people 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 0.5% and jade scape does not hedge against inflation which currently stands at suggestions.7%.
In this aspect, my investors and I take presctiption the same page – we prefer to reap the benefits the current low pace and put our money in 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 high as $1500 after off-setting mortgage costs. This equates for annual passive income as much as $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 result in a slower rise in prices as in comparison to 2010.
Currently, we are able to access that although property prices are holding up, sales are beginning to stagnate. I’m going to attribute this for the following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive costs and buyers’ unwillingness to commit to a higher value tag.
2) Existing demand for properties exceeding supply due to owners being in no hurry to sell, consequently in order to 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 in the property market as their assets will consistently benefit in the long term and increased 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 clients who would like invest consist of types of properties besides the residential segment (such as New Launches & Resales), they likewise consider throughout 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 ever be instructed to sell your house (and develop 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.