“It is not when you buy but when you sell that makes principal to your profit”.
Hence I consistently advise my investors to take care 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 would have 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 great advantage by entering the property market and generating a second income from rental yields instead of putting their cash on your bottom line. Based on the current market, I would advise that they keep a lookout any kind of good investment property where prices have dropped upwards of 10% rather than putting it in a fixed deposit which pays three.5% and does not hedge against inflation which currently stands at some.7%.
In this aspect, my investors and I use 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 of up to $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 go up despite the economic uncertainty, we can easily see that the effect of the cooling measures have lead to a slower rise in prices as the actual 2010.
Currently, we observe that although property prices are holding up, sales start to stagnate. I will attribute this to the following 2 reasons:
1) Many owners’ unwillingness to sell at more affordable prices and buyers’ unwillingness to commit into a higher the price tag.
2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently in order to a improve prices.
I would advise investors to view their jade scape 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 time and increasing amount of value due to 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 consist of types of properties aside from the residential segment (such as New Launches & Resales), they likewise consider purchasing shophouses which likewise support generate passive income; and thus not prone to 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 ever be instructed to sell house (and develop a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and really sell only during an uptrend.