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 take care 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 will want 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 second income from rental yields rather than putting their cash on your bottom line. Based on the current market, I would advise they will keep a lookout any kind of good investment property where prices have dropped an estimated 10% rather than putting it in a fixed deposit which pays 4.5% and does not hedge against inflation which currently stands at simple.7%.

In this aspect, my investors and I are on the same page – we prefer to take advantage of the current low fee and put our make the most property assets to generate 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 with regard to an annual passive income up 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 rise despite the economic uncertainty, we are able to access that the effect of the cooling measures have caused a slower rise in prices as in comparison to 2010.

Currently, we observe that although property prices are holding up, sales are starting to stagnate. I’m going to attribute this to the following 2 reasons:

1) Many owners’ unwillingness to sell at more affordable prices and buyers’ unwillingness to commit to some higher value tag.

2) Existing demand unaltered data exceeding supply due to owners being in no hurry to sell, consequently in order to a improve 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 associated with property market as their assets will consistently benefit in the longer term and trend of value as a result of following:

a) Good governance in Singapore

b) Land scarcity in Singapore, and,

c) Inflation which will set and upward pressure on prices

For jade scape buyers who would like invest consist of types of properties apart from the residential segment (such as New Launches & Resales), they might also consider investing in shophouses which likewise will 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 importance of having ‘holding power’. Never be forced to sell house (and create a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and require to sell only during an uptrend.