Committing to Singapore Properties

“It is not when you buy but when you sell that makes the gap 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 for the 4-year Seller’s Stamp Duty (SSD) that they will want 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 great advantage by entering the property market and generating passive income from rental yields compared to putting their cash secured. Based on the current market, I would advise they keep a lookout any kind of good investment property where prices have dropped very 10% rather than putting it in a fixed deposit which pays three.5% and does not hedge against inflation which currently stands at 5.7%.

In this aspect, my investors and I take presctiption the same page – we prefer to take advantage of the current low 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 a good annual passive income all the way to $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 rise despite the economic uncertainty, we can easily see that the effect of the cooling measures have cause a slower rise in prices as compared to 2010.

Currently, we observe that although property prices are holding up, sales start 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 with a higher price.

2) Existing demand unaltered data 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 jade scape singapore property assets as long-term investments. They ought to not be excessively alarmed by a slowdown your market property market as their assets will consistently benefit in the longer term and increasing amount of value as a result of following:

a) Good governance in Singapore

b) Land scarcity in Singapore, and,

c) Inflation which will set and upward pressure on prices

For clients who would like invest some other types of properties aside from the residential segment (such as New Launches & Resales), they could also consider inside shophouses which likewise will help generate passive income; and therefore not at the mercy of the recent government cooling measures like the 16% SSD and 40% downpayment required on residential properties.

I cannot help but stress the significance of having ‘holding power’. Never be required to sell household (and create a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and it’s sell only during an uptrend.