Committing to Singapore Properties

“It is not calling it buy but when you sell that makes the gap 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 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 gift by entering the property market and generating second income from rental yields rather than putting their cash on your bottom line. Based on the current market, I would advise that they keep a lookout any kind of good investment property where prices have dropped upwards of 10% rather than putting it in a fixed deposit which pays 4.5% and does not hedge against inflation which currently stands at suggestions.7%.

In this aspect, my investors and I take any presctiption the same page – we prefer to make the most of the current low pace 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 as many as $1500 after off-setting mortgage costs. This equates with regard to an annual passive income as high as $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 despite the economic uncertainty, we could see that the effect of the cooling measures have can lead to a slower rise in prices as when compared with 2010.

Currently, we cane easily see that although property prices are holding up, sales start to stagnate. I am going to attribute this into the following 2 reasons:

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

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 ought to not be excessively alarmed by a slowdown associated with property market as their assets will consistently benefit in the long term and jade scape boost in value due to the 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 consist of types of properties besides the residential segment (such as New Launches & Resales), they could also consider purchasing shophouses which likewise will help generate passive income; are usually not depending upon the recent government cooling measures such as the 16% SSD and 40% downpayment required on residential properties.

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