“It is not calling it buy but when you sell that makes principal to your profit”.
Hence I consistently advise my investors to ensure that 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 will 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 boon by entering the property market and generating passive income from rental yields compared to putting their cash in the bank. Based on the current market, I would advise they 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 some.7%.
In this aspect, my investors and I take prescription the same page – we prefer to reap the benefits of the current low price and put our make the most property assets to generate a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of up to $1500 after off-setting mortgage costs. This equates a good annual passive income all the way to $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 elevate despite the economic uncertainty, we are able to access that the effect of the cooling measures have can lead to a slower rise in prices as when compared with 2010.
Currently, we look at that although property prices are holding up, sales are starting to stagnate. I will attribute this into the following 2 reasons:
1) Many owners’ unwillingness to sell at lower prices and buyers’ unwillingness to commit with a higher charges.
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. They ought to not be excessively alarmed by a slowdown associated with property market as their assets will consistently benefit in time and trend 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 in other types of properties aside from the residential segment (such as New Launches & Resales), jade scape they could also consider buying shophouses which likewise assist generate passive income; are usually not depending upon the recent government cooling measures a lot 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the significance of having ‘holding power’. You shouldn’t be expected to sell household (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.