“It is not when you buy but when you sell that makes learn 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 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 great advantage by entering the property market and generating a second income from rental yields rather than putting their cash in the bank. Based on the current market, I would advise they keep a lookout for good investment property where prices have dropped a great deal more 10% rather than putting it in a fixed deposit which pays three.5% and 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 probably the current low interest rate and put our money in property assets to generate 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 furthermore outperforms dividend returns from stocks.
Even though prices of private properties have continued to elevate despite the economic uncertainty, we notice that the effect of the cooling measures have caused a slower rise in prices as the actual 2010.
Currently, we observe that although property prices are holding up, sales are beginning to stagnate. Let me attribute this towards following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive costs and buyers’ unwillingness to commit with a higher promoting.
2) Existing demand for properties exceeding supply due to owners being in no hurry to sell, consequently in order to a embrace prices.
I would advise investors to view their Singapore property assets as long-term investments. Really should not be excessively alarmed by a slowdown in the property market as their assets will consistently benefit in the long term and boost in value as a result of following:
a) Good governance in Singapore
b) Land scarcity in jade scape singapore, and,
c) Inflation which will set and upward pressure on prices
For clients who would like invest consist of types of properties aside from the residential segment (such as New Launches & Resales), they could also consider throughout shophouses which likewise might help generate passive income; and therefore not at the mercy of 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 shouldn’t be instructed to sell house (and develop a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and require to sell only during an uptrend.