“It is not when you buy but when you sell that makes the gap 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 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 compared to putting their cash secured. Based on the current market, I would advise these people keep a lookout any kind of good investment property where prices have dropped very 10% rather than putting it in a fixed deposit which pays three.5% and does not hedge against inflation which currently stands at ideas.7%.
In this aspect, my investors and I are on the same page – we prefer to probably the current low 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 of up to $1500 after off-setting mortgage costs. This equates with regard to an annual passive income 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 despite the economic uncertainty, we notice that the effect of the cooling measures have lead to a slower rise in prices as in comparison to 2010.
Currently, we can see that although property prices are holding up, sales are starting to stagnate. Let me attribute this on the following 2 reasons:
1) Many owners’ unwillingness to sell at affordable prices and buyers’ unwillingness to commit to a higher value tag.
2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently resulting in a embrace prices.
I would advise investors to view their jade scape singapore property assets as long-term investments. They should not be excessively alarmed by a slowdown your market property market as their assets will consistently benefit in over time 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 in other types of properties aside from the residential segment (such as New Launches & Resales), they may also consider inside shophouses which likewise assist generate passive income; are usually not prone to the recent government cooling measures like the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the importance of having ‘holding power’. You should never be made to sell 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.