Property Investment Singapore
Property Investment In Singapore is not only just an investment in properties in Singapore, it's an investment in the Singapore's dream.
Dream is an understatement considering Singapore's long list of successful achievements. Look at the goals set out to ensure Singapore's social and economic stability through the HDB ( Housing & Development Board) in such a way that majority of Singaporeans own a home, and hence the shared ownership in the whole nation success.
Look at the city transformation from a 3rd world to 1st world city through intentional master planning with URA ( Urban Redevelopment Authority). The timely realization of the plans set out shows the strong resolve of Singapore. Hence it's better understood as investing in Singapore's Outstanding Track Records. Therefore before any investment in Singapore, it is absolute necessary for a prudent investor to know how this Temasek has transformed to what it is today. A legacy worth examining. A legacy you should be part of. Own a piece of this dream and join in the amazing journey ahead with Property Investment in Singapore.
Property investment should not be viewed as speculation. Some wants to buy property and then quickly sell for a high price. One should measure the risk factor and understand the market cycle. Singapore real estate market has matured and with the government regulations in place like Additional Buyer Stamp Duties (ABSD), TDSR, Seller Stamp Duties (SSD), and so forth, the room for such maneuvers are hence less seen in recent years after 2013 especially after the introduction of the Total Debt Servicing Ratio (TDSR). Property investment must not be taken lightly as gambling. In fact, the right property investment includes fundamental analysis and shifts to include thorough work to compare prices and ensure a good entry price and upside potential as well as an exit strategy that is well timed.
If you are interested in a long haul property investment journey, do consider property investment as a form of IGA , income generating asset would be a wise approach. Using leverage or commonly known as OPM ( others people money) as per Rich Dad and Poor Dad book, one can make the property work harder. It is therefore important to ensure one understand the concept of liability and asset.
Principles of Property Investment
Once we are clear that investment in real estate is the way forward, we will now share with you a principled approach and various handles and steps to your dream investment.
Principle 1: Start with the end in Mind.
An investment can often start with various objectives in mind, ranging from investment for capital appreciation, investment for rental yield or cash flow, leveraged investment that could become speculative, investment for legacy planning, investment near important landmarks that will be built, investment in view URA Master Plan, and so forth. A thorough understanding of one's own objective(s) is the first step.
If you start with wanting to invest for the long term for capital gain, which essentially in an increase in the value of the capital asset or real estate that gives it a higher worth than the purchase price, the investment horizon should be longer than speculative plays. Then the search for your property may includes location that gives the highest yield. Many people mentioned location, location, location. We will resound, where, what, why. The location that you picked must have a future transformation plan that allows the price to appreciate. Some will say its nearer to the core region of the city, some will say the developing outskirts of the city. Which ever is the case, there is a time frame horizon for these transformation plans usually by the government which you can use as a reference for estimating your duration of investment. If you hold the property for a long long time with no intention to sell, that is not necessary a wise decision either. The reason is that your gain is really only realised upon the sale of the property. One must have an exit strategy in mind, and know when is the time to sell and realise the gain. The right strategy will allow your money to work harder for you. There are various type of real estate investments. You can invest in residential non-landed properties, or landed, or commercial properties or industrial properties, or HDB Shophouses or hotels and so forth.
If you start with wanting to get good rental yield or cash follow. It is important to ensure that they property you buy is of considerable size with sufficient rental transactions per month that will support the renting process and lower the risk of not being able to rent out the unit. Caution: Be careful, never just use what the rent asking as a reference, always fall back on the real rental transactions that took place.
If you would like to start with Legacy planning as your objectives, FreeHold properties are likely your choice option. Generally, FreeHold properties may not perform as well as Leasehold properties in it's rental yield returns, these are usually the favourite picks. Modern legacy planning includes more considerations, ranging from trust, rental incomes to support child education for the longer term than to pass the whole property or properties to the next generation.
Principle 2: Trust what you can verify.
Always approach your investment work with seriousness. It is not buying a consumer product that you can discard if you do not want. Besides the associated cost, legal fees, its investment quantum is far far larger than the price of your shirt or dress. Look for information sources that will help you fill the information gaps. Be clear about what are information that will not change and what can. For example, a transaction is a good source of information, whereas a listing price can be changed or manipulated by those who advertised.
Principle 3: Engage a good advisor and negotiator.
The right advisor would be able to gather all the information, facts and figures necessary for your initial analysis. This is not a trivial exercise. Imagine the work one person put in for analyzing what is the best dress or best tour package, much much more work must be invested into this property investment. The sheer real estate analysis hours put in must be proportional to the quantum of money intended for investment.
Understanding the various financial instruments and how the various regulatory frameworks and rules will affect your overall strategic investment is crucial in the overall strategy. Someone who is trained will ensure you know your rights and the pitfalls you should avoid.
More importantly, the right advisor should also serve as a good negotiator to assist you in getting the price that you want and protect your interest.
Principle 4: Have a step by step checklist even if you have an advisor.
Trust has to be earned. Preparing a checklist and knowing what you want to look for in a property or an agent is paramount to helping you keep track of your investment progress.
Principle 5: Give yourself ample time.
Giving yourself amble time to prepare is important. Performing back-testing is a brilliant way of thinking about what would happen if you had taken a certain investment decisions. Not all real estate advisors is able to show you what it really means. Choose one that can help you assess your decision. You would need time to think through and if you are able to pen and calculate your investment decision on paper, you are likely on the right track. Never invest blindly. Some investors go to the extent of performing real estate modeling and predicting the markets. These are good ways to try to work out one's thought process. Still, no one can ever predict the market. However if you are able to be clear on what are good entry signals and what are the exit signals, you should be able to ride the real estate wave with ease.
Feel free to call Michelle @ should you need further advice or consultancy services before you next step into your property investment in Singapore.