“It is not in case you buy but when you sell that makes the gap 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 would 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 advantage by entering the property market and generating second income from rental yields regarding putting their cash secured. Based on the current market, I would advise they will keep a lookout regarding any good investment property where prices have dropped very 10% rather than putting it in a fixed deposit which pays 0.5% and does not hedge against inflation which currently stands at ideas.7%.
In this aspect, my investors and I use the same page – we prefer to probably the current low rate and put our benefit 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 of up to $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 could see that the effect of the cooling measures have can lead to a slower rise in prices as the actual 2010.
Currently, we can see that although property prices are holding up, sales are starting to stagnate. I am going to attribute this on the following 2 reasons:
1) Many owners’ unwillingness to sell at more affordable prices and buyers’ unwillingness to commit to some higher value tag.
2) Existing demand for properties exceeding supply due to owners being in no hurry to sell, consequently resulting in a increase prices.
I would advise investors to view their Singapore property assets as long-term investments. They should not be excessively alarmed by a slowdown in the 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 consist of types of properties aside from the residential segment (such as New Launches & Resales), they likewise consider inside shophouses which likewise might help generate passive income; and therefore not prone to the recent government cooling measures a lot 16% SSD and jade scape 40% downpayment required on homes.
I cannot help but stress the need for having ‘holding power’. Never be required to sell your house (and develop a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and really sell only during an uptrend.