Investing in Singapore Properties

“It is not in case you buy but when you sell that makes the difference to your profit”.

Hence I consistently advise my investors to ensure that they have gone through their financial plans thoroughly as they will be entering into a 4-year commitment – after for 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 advantage by entering the property market and generating passive income from rental yields compared to putting their cash on your bottom line. Based on the current market, I would advise they will keep a lookout any kind of good investment property where prices have dropped an estimated 10% rather than putting it in a fixed deposit which pays 4.5% and jade scape does not hedge against inflation which currently stands at some.7%.

In this aspect, my investors and I take any presctiption the same page – we prefer to make the most of the current low pace and put our profit in property assets to produce 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 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 can lead to a slower rise in prices as compared to 2010.

Currently, we can see that although property prices are holding up, sales are starting to stagnate. I will attribute this for the following 2 reasons:

1) Many owners’ unwillingness to sell at affordable prices and buyers’ unwillingness to commit into a higher price.

2) Existing demand for properties 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 Singapore property assets as long-term investments. They ought to not be excessively alarmed by a slowdown your market 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 place and upward pressure on prices

For clients who would like invest some other types of properties apart from the residential segment (such as New Launches & Resales), they furthermore consider buying shophouses which likewise assist generate passive income; are usually not controlled by 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 should never be made to sell your house (and make a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and it’s sell only during an uptrend.

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