“It is not when you buy but when you sell that makes the gap to your profit”.
Hence I consistently advise my investors to guantee that they have gone through their financial plans thoroughly as they will be entering into a 4-year commitment – after taking into consideration 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 great advantage by entering the property market and generating residual income from rental yields regarding 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 an estimated 10% rather than putting it in a fixed deposit which pays 4.5% and does not hedge against inflation which currently stands at ideas.7%.
In this aspect, my investors and I use the same page – we prefer to make the most of the current low fee and put our benefit property assets to produce a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of of up to $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 as well outperforms dividend returns from stocks.
Even though prices of private properties have continued to elevate despite the economic uncertainty, we can see that the effect of the cooling measures have caused a slower rise in prices as when compared with 2010.
Currently, we look at that although property prices are holding up, sales are starting to stagnate. I am going to attribute this into the following 2 reasons:
1) Many owners’ unwillingness to sell at lower prices and jade scape buyers’ unwillingness to commit together with higher the price tag.
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. They ought to not be excessively alarmed by a slowdown in the property market as their assets will consistently benefit in time and boost in 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 buyers who would like invest in other types of properties apart from the residential segment (such as New Launches & Resales), they furthermore consider investing in shophouses which likewise assist generate passive income; that are not depending upon the recent government cooling measures like the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the importance of having ‘holding power’. You shouldn’t be required to sell household (and make 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.