“It is not when you buy but when you sell that makes the gap to your profit”.
Hence I consistently advise my investors to be sure 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 must pay if they sell their property before 4 years.
Once they have determined the amount of finances they are willing to outlay, they will set themselves at a advantage by entering the property market and generating a second income from rental yields compared to putting their cash in the bank. Based on the current market, I would advise may keep a lookout virtually any good investment property where prices have dropped upwards of 10% rather than putting it in a fixed deposit which pays .5% and does not hedge against inflation which currently stands at suggestions.7%.
In this aspect, my investors and I use the same page – we prefer to reap the benefits of the current low interest rate and put our make the most 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 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 rise despite the economic uncertainty, we are able to access that the effect of the cooling measures have result in a slower rise in prices as the actual 2010.
Currently, jade scape we cane easily see that although property prices are holding up, sales are beginning to stagnate. I’m going to attribute this towards following 2 reasons:
1) Many owners’ unwillingness to sell at lower prices and buyers’ unwillingness to commit together with higher the price tag.
2) Existing demand unaltered data exceeding supply due to owners finding yourself in no hurry to sell, consequently in order to a enhance 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 associated with property market as their assets will consistently benefit in over time and increased value due to the 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 in other types of properties aside from the residential segment (such as New Launches & Resales), they may also consider inside shophouses which likewise might help generate passive income; that are not controlled by the recent government cooling measures such as the 16% SSD and 40% downpayment required on residential properties.
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. Remember that the property market moves in a cyclical pattern and really sell only during an uptrend.