01 Nov

Committing to Singapore Properties

“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 sure 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 will want 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 great advantage by entering the property market and generating second income from rental yields instead of putting their cash in the bank. Based on the current market, I would advise they will keep a lookout for any good investment property where prices have dropped upwards of 10% rather than putting it in a fixed deposit which pays three.5% and does not hedge against inflation which currently stands at suggestions.7%.

In this aspect, my investors and I take any presctiption the same page – we prefer to probably the current low interest rate and put our make the most property assets to produce a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of up to $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 furthermore outperforms dividend returns from stocks.

Even though prices of private properties have continued to increase despite the economic uncertainty, we can easily see that the effect of the cooling measures have lead to a slower rise in prices as when compared with 2010.

Currently, we can see that although property prices are holding up, sales start to stagnate. I am going to attribute this on the following 2 reasons:

1) Many owners’ unwillingness to sell at more affordable prices and buyers’ unwillingness to commit with a higher promoting.

2) Existing demand unaltered data exceeding supply due to owners being 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 associated with property market as their assets will consistently benefit in time and increase in value due to the following:

a) Good governance in Singapore

b) Land scarcity in Singapore, and,

c) Inflation which will set and upward pressure on prices

For buyers who would like invest some other types of properties in addition to the residential segment (such as New Launches & Resales), they could also consider throughout shophouses which likewise can help generate passive income; that are not at the mercy of the recent government cooling measures prefer the 16% SSD and 40% downpayment required on homes.

I cannot help but stress the need for having ‘holding power’. You should 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 you will need to sell only during an uptrend.