Committing to Singapore Properties

“It is not calling it buy but when you sell that makes principal 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 with the 4-year Seller’s Stamp Duty (SSD) that they must 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 advantage by entering the property market and generating a second income from rental yields instead of putting their cash in the bank. Based on the current market, I would advise may keep a lookout any kind of good investment property where prices have dropped an estimated 10% rather than putting it in a fixed deposit which pays 4.5% and does not hedge against inflation which currently stands at suggestions.7%.

In this aspect, my investors and I take any presctiption the same page – we prefer to reap the benefits the current low interest rate 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 many as $1500 after off-setting mortgage costs. This equates with regard 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 go up despite the economic uncertainty, we notice that the effect of the cooling measures have lead to a slower rise in prices as in comparison to 2010.

Currently, we look at that although property prices are holding up, sales are starting to stagnate. I am going to 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 the price tag.

2) Existing demand unaltered data exceeding supply due to owners being in no hurry to sell, consequently resulting in a embrace prices.

I would advise investors to view their Singapore property assets as long-term investments. They ought to not be excessively alarmed by a slowdown associated with property market as their assets will consistently benefit in the long run and trend 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 buyers who would like invest various other types of properties apart from the residential segment (such as New Launches & Resales), they may also consider buying shophouses which likewise might help generate passive income; that are not at the mercy of 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 ever be required to sell household (and create a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and jade scape you will need to sell only during an uptrend.