“It is not when you buy but when you sell that makes the difference 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 for 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 they keep a lookout for any good investment property where prices have dropped an estimated 10% rather than putting it in a fixed deposit which pays .5% and does not hedge against inflation which currently stands at ideas.7%.
In this aspect, my investors and jade scape 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 generate 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 with regard to an annual passive income as much as $18 000 per annum which easily beats returns from fixed deposits additionally the outperforms dividend returns from stocks.
Even though prices of private properties have continued to elevate despite the economic uncertainty, we could see that the effect of the cooling measures have can lead to a slower rise in prices as in order to 2010.
Currently, we can see 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 more affordable prices and buyers’ unwillingness to commit to a higher promoting.
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. Really should not be excessively alarmed by a slowdown in the property market as their assets will consistently benefit in over time and increase in 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 in addition to the residential segment (such as New Launches & Resales), they furthermore consider buying shophouses which likewise assist generate passive income; are usually not at the mercy of the recent government cooling measures similar to the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the need for having ‘holding power’. Never be expected to sell your stuff (and develop a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and you should sell only during an uptrend.