“It is not when you buy but when you sell that makes learn 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 for the 4-year Seller’s Stamp Duty (SSD) that they will have to pay if they sell their property before 4 years.
Once they have determined the amount of finances they are willing to outlay, they will set themselves at a great advantage by entering the property market and generating passive income from rental yields compared to putting their cash secured. Based on the current market, I would advise may keep a lookout for any good investment property where prices have dropped upwards of 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 any presctiption the same page – we prefer to make the most of the current low pace 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 for annual passive income as much as $18 000 per annum which easily beats returns from fixed deposits and also outperforms dividend returns from stocks.
Even though prices of private properties have continued to rise despite the economic uncertainty, we are able to access that the effect of the cooling measures have lead to a slower rise in prices as the actual 2010.
Currently, we can see that although property prices are holding up, sales are beginning to stagnate. I am going to attribute this towards following 2 reasons:
1) Many owners’ unwillingness to sell at lower prices and buyers’ unwillingness to commit to a higher price.
2) Existing demand for properties exceeding supply due to owners being in no hurry to sell, consequently in order to a increase 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 time and increase in 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 clients who would like invest various other types of properties in addition to the residential segment (such as New Launches & Resales), they may also consider throughout shophouses which likewise will help generate passive income; that are not at the mercy of the recent government cooling measures such as the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the significance of having ‘holding power’. You shouldn’t be instructed to sell household (and jade scape make a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and require to sell only during an uptrend.