“It is not when you buy but when you sell that makes the difference 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 need 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 second income from rental yields associated with putting their cash staying with you. Based on the current market, I would advise these people keep a lookout regarding any good investment property where prices have dropped upwards of 10% rather than putting it in a fixed deposit which pays .5% and does not hedge against inflation which currently stands at simple.7%.
In this aspect, my investors and I use the same page – we prefer to reap the benefits of the current low price and put our benefit 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 high as $1500 after off-setting mortgage costs. This equates for annual passive income all the way to $18 000 per annum which easily beats returns from fixed deposits plus 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 cause a slower rise in prices as in order to 2010.
Currently, we look at that although property prices are holding up, sales are beginning to stagnate. Let me attribute this on the following 2 reasons:
1) Many owners’ unwillingness to sell at lower prices and buyers’ unwillingness to commit with a higher value tag.
2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently leading to a embrace prices.
I would advise investors to view their jade scape singapore property assets as long-term investments. Will need to not be excessively alarmed by a slowdown your market property market as their assets will consistently benefit in the long run and increasing amount of value as a result of 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 some other types of properties besides the residential segment (such as New Launches & Resales), they furthermore consider investing in shophouses which likewise support generate passive income; that are 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 importance of having ‘holding power’. You shouldn’t be expected to sell your property (and create 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.