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 for 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 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, jade scape I would advise that they keep a lookout regarding any good investment property where prices have dropped very 10% rather than putting it in a fixed deposit which pays two.5% and does not hedge against inflation which currently stands at simple.7%.

In this aspect, my investors and I take presctiption the same page – we prefer to probably 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 to an annual passive income as high 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 rise despite the economic uncertainty, we notice that the effect of the cooling measures have can lead to a slower rise in prices as the actual 2010.

Currently, we observe that although property prices are holding up, sales are beginning to stagnate. I will attribute this to the following 2 reasons:

1) Many owners’ unwillingness to sell at less expensive costs and buyers’ unwillingness to commit to some higher value tag.

2) Existing demand unaltered data exceeding supply due to owners finding yourself in no hurry to sell, consequently in order to a rise in prices.

I would advise investors to view their Singapore property assets as long-term investments. Really should not be excessively alarmed by a slowdown within property market as their assets will consistently benefit in the long run and trend of value due to the following:

a) Good governance in Singapore

b) Land scarcity in Singapore, and,

c) Inflation which will set and upward pressure on prices

For buyers who would like invest in other types of properties in addition to the residential segment (such as New Launches & Resales), they might also consider investing in shophouses which likewise support generate passive income; and thus not depending upon the recent government cooling measures similar to the 16% SSD and 40% downpayment required on homes.

I cannot help but stress the importance of having ‘holding power’. You should 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 require to sell only during an uptrend.