Investing in 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 taking into consideration the 4-year Seller’s Stamp Duty (SSD) that they will want 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 residual income from rental yields rather than putting their cash on your bottom line. Based on the current market, I would advise that they keep a lookout regarding 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 are on the same page – we prefer to reap the benefits the current low fee and put our take advantage 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 many as $1500 after off-setting mortgage costs. This equates for 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 increase despite the economic uncertainty, jade scape we are able to access that the effect of the cooling measures have cause a slower rise in prices as in comparison to 2010.

Currently, we can see that although property prices are holding up, sales start to stagnate. I’m going to attribute this on the following 2 reasons:

1) Many owners’ unwillingness to sell at less expensive costs and buyers’ unwillingness to commit into a higher value tag.

2) Existing demand unaltered data exceeding supply due to owners being in no hurry to sell, consequently resulting in a enhance 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 each morning property market as their assets will consistently benefit in time and increased 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 buyers who would like invest some other types of properties aside from the residential segment (such as New Launches & Resales), they could also consider buying shophouses which likewise might help generate passive income; and are not controlled by the recent government cooling measures similar to the 16% SSD and 40% downpayment required on homes.

I cannot help but stress the significance of having ‘holding power’. You shouldn’t be expected to sell your house (and make a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and you will need to sell only during an uptrend.