“It is not in case you buy but when you sell that makes the difference 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 want 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 gift by entering the property market and generating a second income from rental yields instead of putting their cash in the bank. Based on the current market, I would advise may keep a lookout regarding any good investment property where prices have dropped a great deal more 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 any presctiption the same page – we prefer to reap the benefits the current low fee 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 a whole lot $1500 after off-setting mortgage costs. This equates with regard 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 elevate despite the economic uncertainty, we notice that the effect of the cooling measures have caused a slower rise in prices as when compared with 2010.
Currently, we observe that although property prices are holding up, sales start to stagnate. I am going to attribute this towards following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive costs and buyers’ unwillingness to commit into a higher promoting.
2) Existing demand unaltered data exceeding supply due to owners finding yourself in no hurry to sell, consequently in order to a enhance 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 in the property market as their assets will consistently benefit in the long run and increased value as a result of following:
a) Good governance in Singapore
b) Land scarcity in Singapore, and,
c) Inflation which will set and upward pressure on prices
For buyers who would like invest various other types of properties in addition to the residential segment (such as New Launches & Resales), they likewise consider inside shophouses which likewise support generate passive income; and are not controlled by 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 be required to sell your stuff (and create a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and jade scape you will need to sell only during an uptrend.