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 be certain 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 have 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 great advantage by entering the property market and generating passive income from rental yields rather than putting their cash secured. Based on the current market, I would advise they keep a lookout regarding any good investment property where prices have dropped an estimated 10% rather than putting it in a fixed deposit which pays .5% and does not hedge against inflation which currently stands at ideas.7%.

In this aspect, my investors and I take prescription the same page – we prefer to reap the benefits the current low fee and put our money 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 many 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 additionally the outperforms dividend returns from stocks.

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

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

1) Many owners’ unwillingness to sell at less expensive prices and buyers’ unwillingness to commit to a higher price.

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. Really should not be excessively alarmed by a slowdown your market property market as their assets will consistently benefit in the long term and increased value due to the following:

a) Good governance in Singapore

b) Land scarcity in Singapore, and,

c) Inflation which will place and upward pressure on prices

For jade scape clients who would like invest various other types of properties aside from the residential segment (such as New Launches & Resales), they likewise consider inside shophouses which likewise might help generate passive income; and thus not depending upon the recent government cooling measures prefer the 16% SSD and 40% downpayment required on residential properties.

I cannot help but stress the value of having ‘holding power’. You shouldn’t be forced to sell your property (and develop 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.