“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 want 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 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 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 does not hedge against inflation which currently stands at suggestions.7%.
In this aspect, my investors and I take prescription the same page – we prefer to reap the benefits of the current low 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 a whole lot $1500 after off-setting mortgage costs. This equates a good annual passive income all the way to $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 go up despite the economic uncertainty, we can easily see that the effect of the cooling measures have lead to a slower rise in prices as in order to 2010.
Currently, we look at that although property prices are holding up, sales are beginning to stagnate. I’m going to attribute this into the following 2 reasons:
1) Many owners’ unwillingness to sell at more affordable prices and buyers’ unwillingness to commit to some higher charges.
2) Existing demand unaltered data exceeding supply due to owners being in no hurry to sell, consequently resulting in a rise in prices.
I would advise investors to view their jade scape singapore property assets as long-term investments. Will need to not be excessively alarmed by a slowdown in the property market as their assets will consistently benefit in over time and increase in 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 buyers who would like invest consist of types of properties apart from the residential segment (such as New Launches & Resales), they may also consider investing in shophouses which likewise support generate passive income; and therefore not subject to the recent government cooling measures such as the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the importance of having ‘holding power’. You shouldn’t be made to sell your stuff (and make a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and you should sell only during an uptrend.