“It is not calling it buy but when you sell that makes principal to your profit”.
Hence I consistently advise my investors to ensure 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 need 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 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 for good investment property where prices have dropped very 10% rather than putting it in a fixed deposit which pays two.5% and does not hedge against inflation which currently stands at simple.7%.
In this aspect, my investors and I take presctiption the same page – we prefer to reap the benefits the current low price and put our money 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 with regard to an annual passive income as much as $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 rise despite the economic uncertainty, we are able to access that the effect of the cooling measures have caused a slower rise in prices as when compared with 2010.
Currently, we observe that although property prices are holding up, sales start to stagnate. I am going to attribute this towards following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive prices and buyers’ unwillingness to commit together with higher charges.
2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently resulting in 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 the longer term and increasing amount 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 clients who would like invest various other types of properties in addition to the residential segment (such as New Launches & Resales), they might also consider investing in shophouses which likewise will help generate passive income; and are not controlled by the recent government cooling measures similar to the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the value of having ‘holding power’. You must never be expected to sell 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.