“It is not an individual have 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 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 great advantage by entering the property market and generating passive income from rental yields instead of putting their cash in the bank. Based on the current market, I would advise they keep a lookout any kind of good investment property where prices have dropped an estimated 10% rather than putting it in a fixed deposit which pays three.5% and does not hedge against inflation which currently stands at 5.7%.
In this aspect, my investors and I take presctiption the same page – we prefer to reap the benefits of the current low interest rate and put our take advantage property assets to produce 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 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 elevate despite the economic uncertainty, we notice that the effect of the cooling measures have lead to a slower rise in prices as when compared with 2010.
Currently, we can see that although property prices are holding up, sales are starting to stagnate. Let me attribute this to the following 2 reasons:
1) Many owners’ unwillingness to sell at affordable prices and buyers’ unwillingness to commit to a higher promoting.
2) Existing demand for properties exceeding supply due to owners being in no hurry to sell, jade scape consequently in order to a rise in 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 the longer term and increase in 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 buyers who would like invest consist of types of properties aside from the residential segment (such as New Launches & Resales), they furthermore consider purchasing shophouses which likewise can help generate passive income; and are not prone to the recent government cooling measures a lot 16% SSD and 40% downpayment required on homes.
I cannot help but stress the significance of having ‘holding power’. You shouldn’t ever be instructed to sell your house (and create a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and require to sell only during an uptrend.