“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 ensure 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 will need 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 advantage by entering the property market and generating residual income from rental yields associated with putting their cash in the bank. Based on the current market, I would advise may keep a lookout for any good investment property where prices have dropped a great deal more 10% rather than putting it in a fixed deposit which pays 4.5% and does not hedge against inflation which currently stands at 5.7%.
In this aspect, my investors and I take presctiption the same page – we prefer to reap the benefits of the current low rate and jade scape put our make the most property assets to generate 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 a good annual passive income as much as $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 elevate despite the economic uncertainty, we notice that the effect of the cooling measures have result in a slower rise in prices as the actual 2010.
Currently, we cane easily see that although property prices are holding up, sales are starting to stagnate. Let me attribute this for the following 2 reasons:
1) Many owners’ unwillingness to sell at more affordable prices and buyers’ unwillingness to commit to a higher price.
2) Existing demand for properties exceeding supply due to owners being in no hurry to sell, consequently leading to a increase 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 within 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 clients who would like invest some other types of properties besides the residential segment (such as New Launches & Resales), they might also consider purchasing shophouses which likewise support generate passive income; and are not prone to the recent government cooling measures such as the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the need for having ‘holding power’. You should never be instructed to sell your property (and make a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and you will need to sell only during an uptrend.