“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 taking into consideration the 4-year Seller’s Stamp Duty (SSD) that they will want 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 boon by entering the property market and generating passive income from rental yields rather than putting their cash staying with you. Based on the current market, I would advise they will keep a lookout for 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 5.7%.
In this aspect, my investors and I take prescription the same page – we prefer to take advantage of the current low fee and put our money in property assets to generate 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 a good 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 rise despite the economic uncertainty, we can easily see that the effect of the cooling measures have cause a slower rise in prices as in order to 2010.
Currently, we cane easily see 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 lower prices and buyers’ unwillingness to commit together with higher promoting.
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. Really should not be excessively alarmed by a slowdown your market property market as their assets will consistently benefit in the long run and increasing amount of value due to the following:
a) Good governance in Singapore
b) Land scarcity in jade scape singapore, and,
c) Inflation which will place and upward pressure on prices
For clients who would like invest consist of types of properties apart from the residential segment (such as New Launches & Resales), they could also consider buying shophouses which likewise support generate passive income; and therefore not subject to the recent government cooling measures like the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the importance of having ‘holding power’. You must never be instructed to sell your house (and create a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and really sell only during an uptrend.