“It is not when you buy but when you sell that makes principal to your profit”.
Hence I consistently advise my investors to be certain 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 gift by entering the property market and generating passive income from rental yields instead of putting their cash in the bank. Based on the current market, I would advise they 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 some.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 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 with regard to an annual passive income as much as $18 000 per annum which easily beats returns from fixed deposits plus outperforms dividend returns from stocks.
Even though prices of private properties have continued to go up despite the economic uncertainty, we could see that the effect of the cooling measures have result in a slower rise in prices as when compared with 2010.
Currently, we look at 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 less expensive prices and buyers’ unwillingness to commit to a higher charges.
2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently resulting in a improve 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 in the property market as their assets will consistently benefit in the long run and increase in value as a result of 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 in addition to the residential segment (such as New Launches & Resales), they furthermore consider investing in shophouses which likewise will help generate passive income; and therefore not prone to the recent government cooling measures prefer the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the value of having ‘holding power’. You shouldn’t ever be expected to sell house (and make a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and require to sell only during an uptrend.