“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 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 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 second income from rental yields compared to putting their cash in the bank. Based on the current market, I would advise they will keep a lookout virtually any good investment property where prices have dropped an estimated 10% rather than putting it in a fixed deposit which pays two.5% and does not hedge against inflation which currently stands at some.7%.
In this aspect, my investors and I take any presctiption the same page – we prefer to reap the benefits the current low price and put our profit in property assets to produce 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 to an annual passive income up to $18 000 per annum which easily beats returns from fixed deposits plus outperforms dividend returns from stocks.
Even though prices of private properties have continued to go up despite the economic uncertainty, jade scape we notice that the effect of the cooling measures have caused a slower rise in prices as compared to 2010.
Currently, we are able to access that although property prices are holding up, sales are beginning to stagnate. I will attribute this towards following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive prices and buyers’ unwillingness to commit together with higher charges.
2) Existing demand for properties exceeding supply due to owners being in no hurry to sell, consequently leading to a embrace 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 your market property market as their assets will consistently benefit in the long run and trend of value due to the following:
a) Good governance in Singapore
b) Land scarcity in Singapore, and,
c) Inflation which will place and upward pressure on prices
For clients who would like invest some other types of properties apart from the residential segment (such as New Launches & Resales), they may also consider buying shophouses which likewise support generate passive income; and are not depending upon the recent government cooling measures such as the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the value of having ‘holding power’. You must never be required to sell household (and make a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and you should sell only during an uptrend.