Inside Singapore Properties

“It is not when you buy but when you sell that makes principal 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 taking into consideration 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 gift by entering the property market and generating residual income from rental yields instead of putting their cash on your bottom line. Based on the current market, jade scape I would advise they will keep a lookout for 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 are on the same page – we prefer to take advantage of the current low fee and put our make the most property assets to produce 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 for annual passive income up 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 can see that the effect of the cooling measures have caused a slower rise in prices as when compared with 2010.

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

1) Many owners’ unwillingness to sell at affordable prices and buyers’ unwillingness to commit with a higher the price 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. Really should not be excessively alarmed by a slowdown within property market as their assets will consistently benefit in the longer term and increase 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 buyers who would like invest various other types of properties aside from the residential segment (such as New Launches & Resales), they might also consider throughout shophouses which likewise support generate passive income; and are not prone to the recent government cooling measures such as the 16% SSD and 40% downpayment required on residential properties.

I cannot help but stress the value of having ‘holding power’. You must never be instructed to sell your house (and develop 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.