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 sure 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 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 boon by entering the property market and generating residual income from rental yields rather than putting their cash on your bottom line. Based on the current market, I would advise these people keep a lookout for good investment property where prices have dropped upwards of 10% rather than putting it in a fixed deposit which pays .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 probably the current low price and put our make the most property assets to generate a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of a whole lot $1500 after off-setting mortgage costs. This equates to an annual passive income all the way to $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 increase despite the economic uncertainty, we could 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 are beginning to stagnate. I will attribute this for the following 2 reasons:

1) Many owners’ unwillingness to sell at affordable prices and buyers’ unwillingness to commit to a higher value tag.

2) Existing demand for properties exceeding supply due to owners being in no hurry to sell, consequently in order 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 in the property market as their assets will consistently benefit in the long run and increased value as a result of following:

a) Good governance in Singapore

b) Land jade scape scarcity in Singapore, and,

c) Inflation which will place and upward pressure on prices

For clients who would like invest various other types of properties besides the residential segment (such as New Launches & Resales), they likewise consider investing in shophouses which likewise can help generate passive income; that are not at the mercy of the recent government cooling measures prefer the 16% SSD and 40% downpayment required on homes.

I cannot help but stress the significance of having ‘holding power’. You should never be instructed to sell household (and make 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.