“It is not when you buy but when you sell that makes principal 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 a second income from rental yields rather than putting their cash in the bank. Based on the current market, I would advise they will keep a lookout any kind of good investment property where prices have dropped a great deal more 10% rather than putting it in a fixed deposit which pays .5% and does not hedge against inflation which currently stands at simple.7%.
In this aspect, my investors and I take prescription the same page – we prefer to probably the current low pace 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 as many as $1500 after off-setting mortgage costs. This equates with regard to an annual passive income as high as $18 000 per annum which easily beats returns from fixed deposits additionally the outperforms dividend returns from stocks.
Even though prices of private properties have continued to go up 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 in order to 2010.
Currently, we are able to access that although property prices are holding up, sales start to stagnate. Let me attribute this to the following 2 reasons:
1) Many owners’ unwillingness to sell at more affordable prices and buyers’ unwillingness to commit to a higher price.
2) Existing demand jade scape for properties 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. They should not be excessively alarmed by a slowdown your market property market as their assets will consistently benefit in time and trend 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 various other types of properties besides the residential segment (such as New Launches & Resales), they could also consider buying shophouses which likewise assist generate passive income; that are not at the mercy of the recent government cooling measures a lot 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 your house (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.