“It is not when you buy but when you sell that makes the gap 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 have 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 gift by entering the property market and generating a second income from rental yields regarding putting their cash secured. Based on the current market, I would advise they will 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 .5% and does not hedge against inflation which currently stands at simple.7%.
In this aspect, my investors and I are on the same page – we prefer to make the most of the current low pace and put our take advantage property assets to generate a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of a whole lot $1500 after off-setting mortgage costs. This equates with regard to an 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 rise despite the economic uncertainty, we can see that the effect of the cooling measures have lead to a slower rise in prices as the actual 2010.
Currently, we cane easily see that although property prices are holding up, sales start to stagnate. I’m going to attribute this for the following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive costs and buyers’ unwillingness to commit to some higher price.
2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently resulting in a rise in 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 long term and trend of value because of the following:
a) Good governance in Singapore
b) Land jade scape scarcity in Singapore, and,
c) Inflation which will place and upward pressure on prices
For clients who would like invest in other types of properties apart from the residential segment (such as New Launches & Resales), they may also consider throughout shophouses which likewise assist generate passive income; and are not prone to the recent government cooling measures such as the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the importance of having ‘holding power’. You shouldn’t ever be required to sell house (and make a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and you should sell only during an uptrend.