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 certain 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 want 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 second income from rental yields instead of 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 more than 10% rather than putting it in a fixed deposit which pays three.5% and does not hedge against inflation which currently stands at 5.7%.

In this aspect, my investors and I take prescription the same page – we prefer to take advantage of the current low price and put our benefit property assets to produce 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 a good 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 can easily see that the effect of the cooling measures have caused a slower rise in prices as in order to 2010.

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

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

2) Existing demand for properties exceeding supply due to owners finding yourself 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 your market property market as their assets will consistently benefit in the long term and increasing amount of value as a result of following:

a) Good governance in Singapore

b) Land scarcity in Singapore, and,

c) Inflation which will place and upward pressure on prices

For clients who would like invest consist of types of properties aside from the residential segment (such as New Launches & Resales), they could also consider inside shophouses which likewise might help generate passive income; are usually not prone to the recent government cooling measures like the 16% SSD and 40% downpayment required on residential properties.

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