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Nov 02

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 guantee 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 will have to pay if they sell their property before 4 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 associated with putting their cash in the bank. Based on the current market, I would advise they will keep a lookout for 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 some.7%.

In this aspect, my investors and I take any presctiption the same page – we prefer to make the most of the current low price 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 as many as $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 furthermore 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 caused a slower rise in prices as in order to 2010.

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

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

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

I would advise investors to view their Singapore property assets as long-term investments. They ought to not be excessively alarmed by a slowdown each morning property market as their assets will consistently benefit in over time and increase in value due to the following:

a) Good governance in jade scape singapore

b) Land scarcity in Singapore, and,

c) Inflation which will place and upward pressure on prices

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

I cannot help but stress the need for having ‘holding power’. Never be instructed to sell your house (and create a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and you will need to sell only during an uptrend.