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 be sure 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 want 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 advantage by entering the property market and generating passive income from rental yields regarding putting their cash secured. Based on the current market, I would advise they will keep a lookout virtually any good investment property where prices have dropped more than 10% rather than putting it in a fixed deposit which pays 4.5% and does not hedge against inflation which currently stands at some.7%.

In this aspect, my investors and I are on the same page – we prefer to take advantage of the current low fee and put our make the most property assets to produce a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of a whole lot $1500 after off-setting mortgage costs. This equates with regard to an annual passive income up to $18 000 per annum which easily beats returns from fixed deposits as well outperforms dividend returns from stocks.

Even though prices of private properties have continued to despite the economic uncertainty, we could see that the effect of the cooling measures have can lead to a slower rise in prices as when compared with 2010.

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

1) Many owners’ unwillingness to sell at lower prices and buyers’ unwillingness to commit into a higher price.

2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently leading to a improve prices.

I would advise investors to view their Singapore property assets as long-term investments. Will need to not be excessively alarmed by a slowdown associated with property market as their assets will consistently benefit in the longer term and increased 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 in other types of properties aside from the residential segment (such as New Launches & Resales), jade scape they may also consider throughout shophouses which likewise might help generate passive income; and therefore not depending upon the recent government cooling measures similar to the 16% SSD and 40% downpayment required on homes.

I cannot help but stress the need for having ‘holding power’. You shouldn’t ever be required to sell your house (and make a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and you should sell only during an uptrend.