Investing in Singapore Properties

“It is not in case you buy but when you sell that makes principal 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 taking into consideration 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 advantage by entering the property market and generating residual income from rental yields instead of putting their cash secured. Based on the current market, I would advise these people keep a lookout for any good investment property where prices have dropped a great deal more 10% rather than putting it in a fixed deposit which pays three.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 take advantage of the current low rate and put our benefit property assets to generate a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of of up to $1500 after off-setting mortgage costs. This equates with regard to an annual passive income of up to $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 notice that the effect of the cooling measures have can lead to a slower rise in prices as in comparison to 2010.

Currently, we look at that although property prices are holding up, sales are starting to stagnate. I am going to attribute this towards following 2 reasons:

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

2) Existing demand for properties exceeding supply due to owners finding yourself 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. They should not be excessively alarmed by a slowdown each morning property market as their assets will consistently benefit in the longer term and jade scape boost in value because of 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 various other types of properties in addition to the residential segment (such as New Launches & Resales), they might also consider throughout shophouses which likewise can help generate passive income; and thus not controlled by 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 shouldn’t ever be required to sell household (and develop a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and it’s sell only during an uptrend.