“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 gift by entering the property market and generating a second income from rental yields instead of putting their cash in the bank. Based on the current market, I would advise they will keep a lookout for any good investment property where prices have dropped an estimated 10% rather than putting it in a fixed deposit which pays .5% and does not hedge against inflation which currently stands at ideas.7%.
In this aspect, my investors and I take any presctiption the same page – we prefer to probably the current low fee 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 as many 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 furthermore outperforms dividend returns from stocks.
Even though prices of private properties have continued to elevate despite the economic uncertainty, we can see 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 on the following 2 reasons:
1) Many owners’ unwillingness to sell at more affordable prices and buyers’ unwillingness to commit with a higher price.
2) Existing demand for jade scape properties exceeding supply due to owners finding yourself 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. They should not be excessively alarmed by a slowdown associated with property market as their assets will consistently benefit in the long run and boost in value as a result of following:
a) Good governance in Singapore
b) Land scarcity in Singapore, and,
c) Inflation which will place and upward pressure on prices
For buyers who would like invest some other types of properties besides the residential segment (such as New Launches & Resales), they might also consider inside shophouses which likewise assist generate passive income; and are not depending upon the recent government cooling measures similar to the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the importance of having ‘holding power’. You must never be instructed to sell household (and develop a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and it’s sell only during an uptrend.