Investing in Singapore Properties

“It is not when you buy but when you sell that makes distinction is the successful to your profit”.

Hence I consistently advise my investors to be certain they have gone through their financial plans thoroughly as they will be entering into a 4-year commitment – after for the 4-year Seller’s Stamp Duty (SSD) that they must 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 jade scape generating second income from rental yields compared to putting their cash on your bottom line. Based on the current market, I would advise that they 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 4.5% and does not hedge against inflation which currently stands at 5.7%.

In this aspect, my investors and I take any presctiption the same page – we prefer to reap the benefits the current low pace and put our profit in 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 high as $1500 after off-setting mortgage costs. This equates for annual passive income as high 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 elevate despite the economic uncertainty, we could see that the effect of the cooling measures have lead to a slower rise in prices as the actual 2010.

Currently, we can see 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 affordable prices and buyers’ unwillingness to commit into a higher price.

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. Dealerships will have not be excessively alarmed by a slowdown your market property market as their assets will consistently benefit in over time 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 buyers who would like invest in other types of properties besides the residential segment (such as New Launches & Resales), they furthermore consider investing in shophouses which likewise might help generate passive income; and are not at the mercy of the recent government cooling measures such as the 16% SSD and 40% downpayment required on residential properties.

I cannot help but stress the importance of having ‘holding power’. Never be made to sell your stuff (and make a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and you will need to sell only during an uptrend.

Bookmark the permalink.