“It is not when you buy but when you sell that makes the gap to your profit”.
Hence I consistently advise my investors to guantee that 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 must 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 rather than putting their cash in the bank. Based on the current market, I would advise that they 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 0.5% 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 take advantage of the current low pace 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 to an annual passive income as much as $18 000 per annum which easily beats returns from fixed deposits as well 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 when compared with 2010.
Currently, we are able to access that although property prices are holding up, sales are beginning to stagnate. I am going to attribute this to the following 2 reasons:
1) Many owners’ unwillingness to sell at more affordable prices and buyers’ unwillingness to commit to some higher promoting.
2) Existing demand unaltered data exceeding supply due to owners being in no hurry to sell, consequently resulting in 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 in the property market as their assets will consistently benefit in over time and increase 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 jade scape clients who would like invest consist of types of properties besides the residential segment (such as New Launches & Resales), they furthermore consider buying shophouses which likewise assist generate passive income; and thus not depending upon the recent government cooling measures similar to the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the significance of having ‘holding power’. You should never be expected to sell your stuff (and make a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and it’s sell only during an uptrend.