02 Nov

Within Singapore Properties

“It is not when you buy but when you sell that makes learn 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 will need 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 regarding putting their cash in the bank. Based on the current market, I would advise they will keep a lookout regarding any good investment property where prices have dropped more than 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 are on the same page – we prefer to reap the benefits of the current low rate and put our benefit property assets to produce 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 as high as $18 000 per annum which easily beats returns from fixed deposits plus outperforms dividend returns from stocks.

Even though prices of private properties have continued to go up despite the economic uncertainty, we can see that the effect of the cooling measures have cause a slower rise in prices as the actual 2010.

Currently, we cane easily see that although property prices are holding up, sales start to stagnate. I am going to attribute this into the following 2 reasons:

1) Many owners’ unwillingness to sell at lower prices and buyers’ unwillingness to commit with a higher charges.

2) Existing demand unaltered data exceeding supply due to owners being in no hurry to sell, consequently resulting in a improve 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 long run and increased value as a result of following:

a) Good governance in Singapore

b) Land scarcity in Singapore, jade scape and,

c) Inflation which will place and upward pressure on prices

For clients who would like invest in other types of properties besides the residential segment (such as New Launches & Resales), they could also consider purchasing shophouses which likewise will help generate passive income; and are not depending upon the recent government cooling measures like the 16% SSD and 40% downpayment required on homes.

I cannot help but stress the significance of having ‘holding power’. You shouldn’t be made to sell house (and make a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and really sell only during an uptrend.