Investing in Singapore Properties

“It is not an individual have buy but when you sell that makes the difference 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 for the 4-year Seller’s Stamp Duty (SSD) that they would 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 boon by entering the property market and generating passive income from rental yields compared to putting their cash staying with you. Based on the current market, I would advise may keep a lookout regarding any good investment property where prices have dropped upwards of 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 are on the same page – we prefer to take advantage of the current low price and put our take advantage property assets to generate a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of up to $1500 after off-setting mortgage costs. This equates a good annual passive income as high as $18 000 per annum which easily beats returns from fixed deposits as well 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 result in 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’m going to attribute this into the following 2 reasons:

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

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

I would advise investors to view their Singapore property assets as long-term investments. Dealerships will have not be excessively alarmed by a slowdown in the property market as their assets will consistently benefit in the long run and increased value as a result of following:

a) Good governance in Singapore

b) Land scarcity in Singapore, and,

c) Inflation which will set and jade scape upward pressure on prices

For buyers who would like invest in other types of properties aside from the residential segment (such as New Launches & Resales), they could also consider throughout shophouses which likewise support generate passive income; are usually not controlled by the recent government cooling measures prefer the 16% SSD and 40% downpayment required on homes.

I cannot help but stress the significance of having ‘holding power’. You must never be forced to sell your property (and make a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and really sell only during an uptrend.

Bookmark the permalink.