“It is not when you buy but when you sell that makes the difference 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 for 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 gift by entering the property market and generating a second income from rental yields compared to putting their cash on your bottom line. Based on the current market, I would advise that they keep a lookout any kind of good investment property where prices have dropped very 10% rather than putting it in a fixed deposit which pays two.5% and does not hedge against inflation which currently stands at ideas.7%.
In this aspect, my investors and I take any presctiption 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 a whole lot $1500 after off-setting mortgage costs. This equates to an annual passive income all the way to $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 could see that the effect of the cooling measures have cause a slower rise in prices as in order to 2010.
Currently, we cane easily see that although property prices are holding up, sales are beginning to stagnate. I will attribute this on the following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive prices and buyers’ unwillingness to commit together with higher promoting.
2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently in order to a increase prices.
I would advise investors to view their Singapore property assets as long-term investments. They should not be excessively alarmed by a slowdown your market property market as their assets will consistently benefit in time and increase in value because of the following:
a) Good governance in Singapore
b) Land scarcity in jade scape singapore, and,
c) Inflation which will place and upward pressure on prices
For buyers who would like invest consist of types of properties besides the residential segment (such as New Launches & Resales), they may also consider purchasing shophouses which likewise assist generate passive income; and thus not prone to the recent government cooling measures such as the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the need for having ‘holding power’. You must never be made to sell your stuff (and create a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and you should sell only during an uptrend.