“It is not an individual have buy but when you sell that makes the gap 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 with 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 gift by entering the property market and generating passive income from rental yields rather than putting their cash staying with you. Based on the current market, I would advise they keep a lookout any kind of good investment property where prices have dropped upwards of 10% rather than putting it in a fixed deposit which pays two.5% and jade scape does not hedge against inflation which currently stands at some.7%.
In this aspect, my investors and I use the same page – we prefer to reap the benefits of the current low interest rate and put our money 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 as high as $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 additionally the outperforms dividend returns from stocks.
Even though prices of private properties have continued to increase despite the economic uncertainty, we are able to access that the effect of the cooling measures have caused 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 less expensive prices and buyers’ unwillingness to commit with a higher price.
2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently leading to a enhance prices.
I would advise investors to view their Singapore property assets as long-term investments. They should not be excessively alarmed by a slowdown associated with property market as their assets will consistently benefit in the long term and trend of value because of 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 in addition to the residential segment (such as New Launches & Resales), they may also consider purchasing shophouses which likewise support generate passive income; that are 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 need for having ‘holding power’. You must never be expected to sell your house (and develop a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and require to sell only during an uptrend.