Investing in Singapore Properties

“It is not in case you buy but when you sell that makes the difference 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 with the 4-year Seller’s Stamp Duty (SSD) that they will need 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 gift by entering the property market and generating passive income from rental yields regarding putting their cash in the bank. Based on the current market, jade scape I would advise they will keep a lookout virtually any good investment property where prices have dropped upwards of 10% rather than putting it in a fixed deposit which pays 0.5% and does not hedge against inflation which currently stands at simple.7%.

In this aspect, my investors and I are on the same page – we prefer to take advantage of the current low price 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 with regard to an annual passive income up to $18 000 per annum which easily beats returns from fixed deposits plus outperforms dividend returns from stocks.

Even though prices of private properties have continued to increase despite the economic uncertainty, we can easily see that the effect of the cooling measures have result in a slower rise in prices as in comparison to 2010.

Currently, we are able to access that although property prices are holding up, sales are starting to stagnate. Let me attribute this towards following 2 reasons:

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

2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently leading to a enhance prices.

I would advise investors to view their Singapore property assets as long-term investments. Really should not be excessively alarmed by a slowdown your market property market as their assets will consistently benefit in the long term and increasing amount of value because of 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 some other types of properties besides the residential segment (such as New Launches & Resales), they may also consider investing in shophouses which likewise assist generate passive income; that are not at the mercy of the recent government cooling measures such as the 16% SSD and 40% downpayment required on homes.

I cannot help but stress the need for having ‘holding power’. You should never be expected to sell household (and create a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and it’s sell only during an uptrend.