“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 taking into consideration the 4-year Seller’s Stamp Duty (SSD) that they will need 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 passive income from rental yields instead of putting their cash on your bottom line. Based on the current market, I would advise that they keep a lookout for good investment property where prices have dropped a great deal more 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 make the most of the current low rate and put our take advantage 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 a good annual passive income as much as $18 000 per annum which easily beats returns from fixed deposits additionally the outperforms dividend returns from stocks.
Even though prices of private properties have continued to go up despite the economic uncertainty, we notice that the effect of the cooling measures have can lead to a slower rise in prices as in order to 2010.
Currently, jade scape we can see that although property prices are holding up, sales start to stagnate. I will attribute this for 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 being 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 should not be excessively alarmed by a slowdown each morning property market as their assets will consistently benefit in time and boost in value as a result of 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 in other types of properties apart from the residential segment (such as New Launches & Resales), they might also consider investing in shophouses which likewise might help generate passive income; that are not depending upon the recent government cooling measures similar to the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the significance of having ‘holding power’. You should never be instructed to sell your house (and make a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and it’s sell only during an uptrend.