“It is not calling it buy but when you sell that makes distinction is the successful to your profit”.
Hence I consistently advise my investors to be certain they have gone through their financial plans thoroughly as they will be entering into a 4-year commitment – after with 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 gift 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 these people keep a lookout virtually any good investment property where prices have dropped upwards of 10% rather than putting it in a fixed deposit which pays 0.5% and does not hedge against inflation which currently stands at 5.7%.
In this aspect, my investors and I take prescription the same page – we prefer to make the most of the current low rate and put our make the most 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 to an annual passive income as much 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 increase despite the economic uncertainty, we can easily see that the effect of the cooling measures have caused a slower rise in prices as compared to 2010.
Currently, we observe that although property prices are holding up, sales start to stagnate. Let me attribute this into the following 2 reasons:
1) Many owners’ unwillingness to sell at lower prices and buyers’ unwillingness to commit to some higher charges.
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. Dealerships will have not be excessively alarmed by a slowdown your market property market as their assets will consistently benefit in the long term and increasing amount of value due to the following:
a) Good governance in Singapore
b) Land scarcity in Singapore, and,
c) Inflation which will set and upward pressure on prices
For clients who would like invest in other types of properties apart from the residential segment (such as New Launches & Resales), jade scape they furthermore consider purchasing shophouses which likewise support generate passive income; and thus not controlled by the recent government cooling measures such as the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the need for having ‘holding power’. You must never be forced to sell 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.