“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 for 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 boon by entering the property market and generating residual income from rental yields compared to putting their cash secured. Based on the current market, I would advise they will keep a lookout for any 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 suggestions.7%.
In this aspect, my investors and I take prescription the same page – we prefer to take advantage of the current low rate 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 as many as $1500 after off-setting mortgage costs. This equates with regard to an 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 go up despite the economic uncertainty, we can see that the effect of the cooling measures have can lead to a slower rise in prices as in comparison to 2010.
Currently, we observe that although property prices are holding up, sales are beginning to stagnate. I am going to attribute this for the following 2 reasons:
1) Many owners’ unwillingness to sell at affordable prices and buyers’ unwillingness to commit together with higher promoting.
2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently leading to a improve prices.
I would advise investors to view their jade scape singapore property assets as long-term investments. They should not be excessively alarmed by a slowdown within property market as their assets will consistently benefit in the long run and increase 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 various other types of properties besides the residential segment (such as New Launches & Resales), they likewise consider buying shophouses which likewise support generate passive income; and therefore not depending upon the recent government cooling measures prefer the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the need for having ‘holding power’. You shouldn’t ever be made to sell household (and develop a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and you will need to sell only during an uptrend.