“It is not in case you buy but when you sell that makes learn to your profit”.
Hence I consistently advise my investors to guantee 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 boon by entering the property market and generating residual income from rental yields instead of putting their cash in the bank. Based on the current market, I would advise may keep a lookout virtually any 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, jade scape my investors and I take prescription the same page – we prefer to reap the benefits the current low rate and put our take advantage 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 many as $1500 after off-setting mortgage costs. This equates for annual passive income as high as $18 000 per annum which easily beats returns from fixed deposits and also outperforms dividend returns from stocks.
Even though prices of private properties have continued to rise despite the economic uncertainty, we can easily see that the effect of the cooling measures have result in a slower rise in prices as when compared with 2010.
Currently, we cane easily see that although property prices are holding up, sales are beginning to stagnate. I am going to attribute this into the following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive costs and buyers’ unwillingness to commit to a higher price.
2) Existing demand for properties exceeding supply due to owners being in no hurry to sell, consequently leading to a embrace prices.
I would advise investors to view their Singapore property assets as long-term investments. Will need to not be excessively alarmed by a slowdown associated with property market as their assets will consistently benefit in 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 buyers who would like invest consist of types of properties in addition to the residential segment (such as New Launches & Resales), they furthermore consider buying shophouses which likewise will help generate passive income; are usually not controlled by the recent government cooling measures similar to the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the importance of having ‘holding power’. You must never be required to sell your stuff (and develop a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and it’s sell only during an uptrend.