“It is not when you buy but when you sell that makes principal 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 taking into consideration 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 advantage by entering the property market and generating residual income from rental yields rather than putting their cash secured. Based on the current market, I would advise may keep a lookout for good investment property where prices have dropped an estimated 10% rather than putting it in a fixed deposit which pays two.5% and does not hedge against inflation which currently stands at some.7%.
In this aspect, my investors and I use the same page – we prefer to reap the benefits of 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 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 plus outperforms dividend returns from stocks.
Even though prices of private properties have continued to despite the economic uncertainty, we can easily see that the effect of the cooling measures have can lead to a slower rise in prices as compared to 2010.
Currently, we look at 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 affordable prices and buyers’ unwillingness to commit to some higher the price tag.
2) Existing demand unaltered data 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 jade scape singapore property assets as long-term investments. Really should not be excessively alarmed by a slowdown each morning property market as their assets will consistently benefit in time and increased value as a result of 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 consist of types of properties apart from the residential segment (such as New Launches & Resales), they likewise consider throughout shophouses which likewise assist generate passive income; and therefore not depending upon 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 should never be made to sell your property (and develop a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and you will need to sell only during an uptrend.