“It is not an individual have buy but when you sell that makes distinction is the successful to your profit”.
Hence I consistently advise my investors to be certain 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 must 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 advantage by entering the property market and generating residual income from rental yields rather than putting their cash staying with you. Based on the current market, I would advise these people keep a lookout regarding any good investment property where prices have dropped more than 10% rather than putting it in a fixed deposit which pays 4.5% and does not hedge against inflation which currently stands at some.7%.
In this aspect, my investors and I are on the same page – we prefer to reap the benefits the current low fee and put our profit in property assets to generate 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 to an annual passive income as much as $18 000 per annum which easily beats returns from fixed deposits and also outperforms dividend returns from stocks.
Even though prices of private properties have continued to despite the economic uncertainty, we can easily see that the effect of the cooling measures have result in a slower rise in prices as in comparison to 2010.
Currently, we observe that although property prices are holding up, sales are beginning to stagnate. Let me attribute this into the following 2 reasons:
1) Many owners’ unwillingness to sell at lower prices and buyers’ unwillingness to commit into a higher value tag.
2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently leading to a increase prices.
I would advise investors to view their Singapore property assets as long-term investments. Really should not be excessively alarmed by a slowdown your market property market as their assets will consistently benefit in the long term and increase in value as a result of following:
a) Good governance in Singapore
b) Land jade scape scarcity in Singapore, and,
c) Inflation which will place and upward pressure on prices
For buyers who would like invest in other types of properties apart from the residential segment (such as New Launches & Resales), they may also consider buying shophouses which likewise assist generate passive income; and thus not prone to the recent government cooling measures a lot 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the need for having ‘holding power’. You must never be instructed to sell your house (and create a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and you will need to sell only during an uptrend.