“It is not when you buy but when you sell that makes principal to your profit”.
Hence I consistently advise my investors to be sure they have gone through their financial plans thoroughly as they will be entering into a 4-year commitment – after for 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 boon by entering the property market and generating passive income from rental yields instead of putting their cash secured. Based on the current market, I would advise they keep a lookout for any good investment property where prices have dropped an estimated 10% rather than putting it in a fixed deposit which pays two.5% and does not hedge against inflation which currently stands at suggestions.7%.
In this aspect, my investors and I use the same page – we prefer to reap the benefits the current low pace 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 a whole lot $1500 after off-setting mortgage costs. This equates with regard to an annual passive income as high 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 rise despite the economic uncertainty, we can see that the effect of the cooling measures have lead to a slower rise in prices as when compared with 2010.
Currently, we can see that although property prices are holding up, sales are starting to stagnate. I’m going to attribute this to the following 2 reasons:
1) Many owners’ unwillingness to sell at lower prices and buyers’ unwillingness to commit into a higher the price tag.
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. Will need to not be excessively alarmed by a slowdown associated with property market as their assets will consistently benefit in the long run and increase in 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 in other types of properties besides the residential segment (such as New Launches & Resales), they likewise consider inside shophouses which likewise will help generate passive income; and thus 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 need for having ‘holding power’. You shouldn’t ever be required to sell your property (and develop a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and you should sell only during an uptrend.