Investing in Singapore Properties

“It is not when you buy but when you sell that makes the difference to your profit”.

Hence I consistently advise my investors to be sure 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 must 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 advantage by entering the property market and generating second income from rental yields compared to putting their cash secured. Based on the current market, I would advise may keep a lookout virtually any good investment property where prices have dropped very 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 any presctiption the same page – we prefer to reap the benefits the current low rate and put our take advantage 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 for annual passive income as much as $18 000 per annum which easily beats returns from fixed deposits and also outperforms dividend returns from stocks.

Even though prices of private properties have continued to despite the economic uncertainty, we notice that the effect of the cooling measures have lead to 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 will attribute this for the following 2 reasons:

1) Many owners’ unwillingness to sell at lower prices and buyers’ unwillingness to commit into 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 within property market as their assets will consistently benefit in the long run and jade scape increasing amount of 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 buyers who would like invest some other types of properties aside from the residential segment (such as New Launches & Resales), they could also consider purchasing shophouses which likewise can help generate passive income; and are not prone to the recent government cooling measures such as the 16% SSD and 40% downpayment required on homes.

I cannot help but stress the value of having ‘holding power’. Never be instructed to sell house (and create 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.