“It is not when you buy but when you sell that makes the gap to your profit”.
Hence I consistently advise my investors to be certain 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 would have 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 gift by entering the property market and generating second income from rental yields regarding putting their cash on your bottom line. Based on the current market, I would advise they will keep a lookout virtually any good investment property where prices have dropped an estimated 10% rather than putting it in a fixed deposit which pays 0.5% 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 reap the benefits the current low interest rate 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 for annual passive income of up to $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 could see that the effect of the cooling measures have can lead to a slower rise in prices as when compared with 2010.
Currently, we are able to access that although property prices are holding up, jade scape sales are starting to stagnate. I’m 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 price.
2) Existing demand unaltered data exceeding supply due to owners being in no hurry to sell, consequently resulting in a improve 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 your market property market as their assets will consistently benefit in the long run and trend of value because of the following:
a) Good governance in Singapore
b) Land scarcity in Singapore, and,
c) Inflation which will place 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 furthermore consider buying shophouses which likewise support generate passive income; and therefore not subject to the recent government cooling measures similar to the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the significance of having ‘holding power’. Never be expected to sell your house (and develop a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and really sell only during an uptrend.