“It is not when you buy but when you sell that makes distinction is the successful 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 for the 4-year Seller’s Stamp Duty (SSD) that they will 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 passive income from rental yields instead of putting their cash secured. Based on the current market, I would advise that they keep a lookout for good investment property where prices have dropped a great deal more 10% rather than putting it in a fixed deposit which pays three.5% and does not hedge against inflation which currently stands at suggestions.7%.
In this aspect, my investors and I are on the same page – we prefer to probably the current low pace 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 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 plus outperforms dividend returns from stocks.
Even though prices of private properties have continued to despite the economic uncertainty, jade scape we can easily see that the effect of the cooling measures have caused a slower rise in prices as compared to 2010.
Currently, we are able to access that although property prices are holding up, sales are beginning to stagnate. Let me attribute this for the following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive costs and buyers’ unwillingness to commit to some higher promoting.
2) Existing demand unaltered data exceeding supply due to owners being 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 should not be excessively alarmed by a slowdown associated with property market as their assets will consistently benefit in the longer term and increasing amount of value as a result of 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 in other types of properties in addition to the residential segment (such as New Launches & Resales), they furthermore consider purchasing shophouses which likewise can help generate passive income; that are not subject to the recent government cooling measures like the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the value of having ‘holding power’. You shouldn’t be forced to sell house (and create a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and you should sell only during an uptrend.