“It is not when you buy but when you sell that makes the difference to your profit”.
Hence I consistently advise my investors to take care that 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 must 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 boon by entering the property market and generating passive income from rental yields associated with putting their cash staying with you. Based on the current market, I would advise they keep a lookout virtually any good investment property where prices have dropped an estimated 10% rather than putting it in a fixed deposit which pays 0.5% and does not hedge against inflation which currently stands at 5.7%.
In this aspect, my investors and I are on the same page – we prefer to reap the benefits of the current low fee 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 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 furthermore outperforms dividend returns from stocks.
Even though prices of private properties have continued to go up 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 observe that although property prices are holding up, sales are beginning to stagnate. I’m going to attribute this for the following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive prices and buyers’ unwillingness to commit into a higher price.
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 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 boost in value as a result of following:
a) Good governance in Singapore
b) Land scarcity in jade scape singapore, and,
c) Inflation which will place and upward pressure on prices
For clients who would like invest some other types of properties apart from the residential segment (such as New Launches & Resales), they likewise consider investing in shophouses which likewise assist generate passive income; and are not subject to the recent government cooling measures like the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the importance of having ‘holding power’. You shouldn’t be forced to sell your house (and develop 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.