Investing in 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 ensure 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 would 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 gift by entering the property market and generating second income from rental yields rather than putting their cash in the bank. Based on the current market, I would advise these people keep a lookout virtually any good investment property where prices have dropped a great deal more 10% rather than putting it in a fixed deposit which pays 0.5% and does not hedge against inflation which currently stands at 5.7%.

In this aspect, my investors and I take any presctiption the same page – we prefer to reap the benefits the current low fee and put our profit in 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 high as $1500 after off-setting mortgage costs. This equates to an annual passive income as high as $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 despite the economic uncertainty, we are able to access that the effect of the cooling measures have caused a slower rise in prices as the actual 2010.

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

1) Many owners’ unwillingness to sell at lower prices and buyers’ unwillingness to commit to some higher charges.

2) Existing demand unaltered data exceeding supply due to owners being in no hurry to sell, consequently leading to a enhance prices.

I would advise investors to view their jade scape singapore property assets as long-term investments. They should not be excessively alarmed by a slowdown within property market as their assets will consistently benefit in the long run and increased value because of 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 in other types of properties besides the residential segment (such as New Launches & Resales), they may also consider buying shophouses which likewise support generate passive income; are usually not controlled by the recent government cooling measures like the 16% SSD and 40% downpayment required on homes.

I cannot help but stress the significance of having ‘holding power’. You shouldn’t be required to sell household (and make a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and you will need to sell only during an uptrend.