“It is not when you buy but when you sell that makes the difference 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 for 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 great advantage by entering the property market and generating a second income from rental yields instead of putting their cash staying with you. Based on the current market, I would advise they keep a lookout virtually any good investment property where prices have dropped an estimated 10% rather than putting it in a fixed deposit which pays 4.5% and does not hedge against inflation which currently stands at simple.7%.
In this aspect, my investors and I use the same page – we prefer to make the most of the current low fee 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 for annual passive income up to $18 000 per annum which easily beats returns from fixed deposits as well outperforms dividend returns from stocks.
Even though prices of private properties have continued to go up despite the economic uncertainty, we notice that the effect of the cooling measures have lead to a slower rise in prices as the actual 2010.
Currently, we can see that although property prices are holding up, sales start to stagnate. I will attribute this for the 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 being in no hurry to sell, consequently leading to 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 each morning property market as their assets will consistently benefit in time and increase in value as a result of following:
a) Good governance in jade scape singapore
b) Land scarcity in Singapore, and,
c) Inflation which will place and upward pressure on prices
For clients who would like invest some other types of properties besides the residential segment (such as New Launches & Resales), they may also consider inside shophouses which likewise will help generate passive income; and therefore not prone to the recent government cooling measures similar to the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the importance of having ‘holding power’. You must never be forced to sell your house (and make a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and require to sell only during an uptrend.