“It is not when you buy but when you sell that makes principal to your profit”.
Hence I consistently advise my investors to guantee 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 would have 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 gift by entering the property market and generating a second income from rental yields associated with putting their cash staying with you. Based on the current market, I would advise these people keep a lookout for 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 take presctiption the same page – we prefer to reap the benefits the current low rate 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 as high as $1500 after off-setting mortgage costs. This equates for annual passive income of 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 elevate despite the economic uncertainty, we could see that the effect of the cooling measures have caused a slower rise in prices as when compared with 2010.
Currently, we observe that although property prices are holding up, sales start to stagnate. I’m going to attribute this into the following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive costs and buyers’ unwillingness to commit to some higher the price tag.
2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently leading to a rise in prices.
I would advise investors to view their jade scape singapore property assets as long-term investments. Dealerships will have not be excessively alarmed by a slowdown associated with property market as their assets will consistently benefit in the long term and increased value due to the following:
a) Good governance in Singapore
b) Land scarcity in Singapore, and,
c) Inflation which will set and upward pressure on prices
For clients who would like invest various other types of properties aside from the residential segment (such as New Launches & Resales), they could also consider throughout shophouses which likewise support 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 need for having ‘holding power’. You should never be expected to sell your house (and develop a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and really sell only during an uptrend.