“It is not in case you buy but when you sell that makes principal 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 taking into consideration the 4-year Seller’s Stamp Duty (SSD) that they will have 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 passive income from rental yields compared to putting their cash staying with you. Based on the current market, I would advise they will keep a lookout for any good investment property where prices have dropped very 10% rather than putting it in a fixed deposit which pays 0.5% and does not hedge against inflation which currently stands at ideas.7%.
In this aspect, my investors and I take presctiption the same page – we prefer to reap the benefits the current low interest rate 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 a whole lot $1500 after off-setting mortgage costs. This equates for jade scape 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 elevate despite the economic uncertainty, we are able to access that the effect of the cooling measures have result in a slower rise in prices as in order to 2010.
Currently, we look at 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 lower prices and buyers’ unwillingness to commit with a higher the price tag.
2) Existing demand for properties exceeding supply due to owners being in no hurry to sell, consequently leading to a increase prices.
I would advise investors to view their Singapore property assets as long-term investments. Dealerships will have not be excessively alarmed by a slowdown associated with property market as their assets will consistently benefit in time and trend of 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 might also consider throughout shophouses which likewise might help generate passive income; are usually not subject 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 household (and make a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and you will need to sell only during an uptrend.