“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 with 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 advantage by entering the property market and generating a second income from rental yields compared to putting their cash on your bottom line. Based on the current market, I would advise these people keep a lookout any kind of good investment property where prices have dropped a great deal more 10% rather than putting it in a fixed deposit which pays 0.5% and does not hedge against inflation which currently stands at some.7%.
In this aspect, my investors and I take presctiption the same page – we prefer to make the most of the current low rate 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 as high 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 elevate despite the economic uncertainty, we are able to access that the effect of the cooling measures have cause a slower rise in prices as the actual 2010.
Currently, jade scape we cane easily see that although property prices are holding up, sales are starting to stagnate. I will attribute this for the following 2 reasons:
1) Many owners’ unwillingness to sell at affordable prices and buyers’ unwillingness to commit to some higher promoting.
2) Existing demand unaltered data exceeding supply due to owners finding yourself in no hurry to sell, consequently in order to a enhance prices.
I would advise investors to view their Singapore property assets as long-term investments. Really should not be excessively alarmed by a slowdown each morning property market as their assets will consistently benefit in the longer term and increasing amount of value because of the following:
a) Good governance in 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 might also consider buying shophouses which likewise assist generate passive income; and thus not at the mercy of the recent government cooling measures prefer 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 instructed to sell household (and create a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and really sell only during an uptrend.