“It is not in case you buy but when you sell that makes distinction is the successful 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 have 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 boon by entering the property market and generating a second income from rental yields compared to putting their cash secured. Based on the current market, I would advise may keep a lookout regarding any good investment property where prices have dropped more than 10% rather than putting it in a fixed deposit which pays two.5% and does not hedge against inflation which currently stands at simple.7%.
In this aspect, my investors and I take presctiption the same page – we prefer to take advantage of the current low fee and put our profit in property assets to produce a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of up to $1500 after off-setting mortgage costs. This equates to an annual passive income up 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 the actual 2010.
Currently, we can see 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 less expensive costs and buyers’ unwillingness to commit to some higher promoting.
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 jade scape singapore property assets as long-term investments. Dealerships will have not be excessively alarmed by a slowdown associated with property market as their assets will consistently benefit in over time and increasing amount 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 clients who would like invest some other types of properties aside from the residential segment (such as New Launches & Resales), they might also consider investing in shophouses which likewise will help generate passive income; and thus not prone to the recent government cooling measures similar to the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the value of having ‘holding power’. You shouldn’t ever 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 really sell only during an uptrend.