“It is not in case you buy but when you sell that makes the difference to your profit”.
Hence I consistently advise my investors to take care 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 would have to 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 great advantage by entering the property market and generating passive income from rental yields compared to putting their cash staying with you. Based on the current market, I would advise 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 two.5% and does not hedge against inflation which currently stands at 5.7%.
In this aspect, my investors and jade scape I take prescription the same page – we prefer to reap the benefits the current low fee and put our benefit property assets to generate a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of of up to $1500 after off-setting mortgage costs. This equates for annual passive income up to $18 000 per annum which easily beats returns from fixed deposits furthermore outperforms dividend returns from stocks.
Even though prices of private properties have continued to increase despite the economic uncertainty, we could 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 are beginning to stagnate. I am going to attribute this to the following 2 reasons:
1) Many owners’ unwillingness to sell at more affordable prices and buyers’ unwillingness to commit together with higher the price tag.
2) Existing demand unaltered data 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. Will need to not be excessively alarmed by a slowdown your market property market as their assets will consistently benefit in the longer term and boost in 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 some other types of properties besides the residential segment (such as New Launches & Resales), they might also consider investing in shophouses which likewise can help generate passive income; and thus not prone to the recent government cooling measures similar to the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the need for having ‘holding power’. You must never be made to sell 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.