“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 guantee 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 want 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 compared to putting their cash staying with you. Based on the current market, I would advise that they keep a lookout virtually any good investment property where prices have dropped more than 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 any presctiption the same page – we prefer to reap the benefits of the current low interest rate and put our profit 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 to an annual passive income of 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 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 when compared with 2010.
Currently, we can see that although property prices are holding up, sales are starting to stagnate. I am going to attribute this for the following 2 reasons:
1) Many owners’ unwillingness to sell at more affordable prices and buyers’ unwillingness to commit together with higher price.
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. They ought to not be excessively alarmed by a slowdown within property market as their assets will consistently benefit in over time and trend of value due to 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 some other types of properties apart from the residential segment (such as New Launches & Resales), they likewise consider inside shophouses which likewise might help generate passive income; are usually not subject to the recent government cooling measures similar to the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the need for having ‘holding power’. Never be made to sell household (and make 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.