“It is not when you buy but when you sell that makes the difference 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 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 second income from rental yields instead of putting their cash in the bank. Based on the current market, I would advise they 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 .5% and does not hedge against inflation which currently stands at 5.7%.
In this aspect, my investors and I take prescription the same page – we prefer to reap the benefits the current low rate and put our benefit property assets to generate a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of up to $1500 after off-setting mortgage costs. This equates a good annual passive income as much as $18 000 per annum which easily beats returns from fixed deposits furthermore outperforms dividend returns from stocks.
Even though prices of private properties have continued to despite the economic uncertainty, we could see that the effect of the cooling measures have lead to a slower rise in prices as the actual 2010.
Currently, we cane easily see that although property prices are holding up, sales start to stagnate. I am going to attribute this into the following 2 reasons:
1) Many owners’ unwillingness to sell at more affordable prices and buyers’ unwillingness to commit into a higher promoting.
2) Existing demand for properties exceeding supply due to owners being in no hurry to sell, consequently in order 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 each morning property market as their assets will consistently benefit in over 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 clients who would like invest various other types of properties besides the residential segment (such as New Launches & Resales), they might also consider throughout shophouses which likewise will help generate passive income; that are not at the mercy of the recent government cooling measures a lot 16% SSD and 40% downpayment required on homes.
I cannot help but stress the importance of having ‘holding power’. You should never be forced to sell your stuff (and jade scape create a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and it’s sell only during an uptrend.