Committing to Singapore Properties

“It is not an individual have buy but when you sell that makes the gap to your profit”.

Hence I consistently advise my investors to ensure that 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 would have to pay if they sell their property before four years.

Once they have determined the amount of finances they are willing to outlay, they will set themselves at a boon by entering the property market and generating second income from rental yields associated with putting their cash on your bottom line. Based on the current market, I would advise that they keep a lookout regarding any good investment property where prices have dropped a great deal more 10% rather than putting it in a fixed deposit which pays three.5% and does not hedge against inflation which currently stands at simple.7%.

In this aspect, my investors and I take presctiption the same page – we prefer to probably the current low interest rate and put our benefit 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 as high as $18 000 per annum which easily beats returns from fixed deposits and also outperforms dividend returns from stocks.

Even though prices of private properties have continued to increase despite the economic uncertainty, we are able to access that the effect of the cooling measures have result in a slower rise in prices as the actual 2010.

Currently, we look at that although property prices are holding up, sales are starting to stagnate. Let me attribute this to the following 2 reasons:

1) Many owners’ unwillingness to sell at affordable prices and buyers’ unwillingness to commit to some higher the price tag.

2) Existing demand unaltered data exceeding supply due to owners being in no hurry to sell, consequently resulting in a improve prices.

I would advise investors to view their jade scape singapore property assets as long-term investments. They should not be excessively alarmed by a slowdown each morning property market as their assets will consistently benefit in the long run and trend of 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 buyers who would like invest some other types of properties besides the residential segment (such as New Launches & Resales), they might also consider investing in shophouses which likewise might help generate passive income; are usually not at the mercy of the recent government cooling measures like the 16% SSD and 40% downpayment required on homes.

I cannot help but stress the value of having ‘holding power’. You shouldn’t ever be made to sell household (and make a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and you should sell only during an uptrend.