Why real estate still remains as one of the best investment in Singapore!
Let’s think about it. It is very common life goals that one should at least invest in a property in your lifetime.
Most wealthy Singaporeans earlier part of their life of course is either by stating up a business or investing in real estate.
Even if you don’t have enough savings right now. Here are the reasons why you should at least consider real estate investments.
The first reason is that you can invest in a Singapore property for almost free. Let me explain why?
You can start investing in a property and rent it out, collect rent so that you have enough to pay all of the expenses like property tax, maintenance fee and mortgage fees.
As long your property is able to do two things like attract tenants and also able to collect rent that is higher than expenses if those are taken care of.
The only thing that you really need is the 20% down payment. The rest of the 80%, no need to worry your tenant will pay for you, no other asset class can do this.
The second reason, the power of leveraging. Investing in property is one the rare investment class that allows you to leverage up to five times your cash amount.
This means that if the profit is 200K and without debt. A Solid 5 x Times leverage will give you a million dollar profit.
The third reason, properties is tangible.
Just like gold. You can feel and touch the property, but that’s the only similarity both can offer. On the other hand Gold does not produce cash flow
If you don’t believe you can Go and buy a gold bar and keep it in your house and come back and see if 10 years later it produces more gold or not.
So what is so great about tangible investments like Properties, it is the good feeling that gives the property investor like some sort of psychological comfort for example when you buy a property you not only can look at the property you can also touch your property and you feel good inside that you actually own it.
But if you invest in OCBC shares you are out there and you use their ATM machines, do you feel anything..
Well likely you don’t feel it because the fact that you are not the only person owning OCBC shares, In the case of Property ownership is different because you are the owner of that property.
Presumably to say that at this point you are convinced about buying property is indeed a good investment after all, so how to start?
My opinion is very simple and straight forward.
A very safe start...buy brand new flats (BTO) or Condominium
This will help you generate your first pot of gold, whereby most people are earning money either from new BTO or brand new Condominium.
So the usual way is couples get married and buy BTO flats.
Since all new Built to Order flats will be tag with a mandatory 5 years minimum Occupation Period, it will be street smart not to buy any BTO’s from Northern parts of Singapore. BTO’s in the north area makes the least money.
Below examples explains further:
Case study 1
Let’s say both friends working in the same company drawing the same salary scale
Both friends decided to buy BTO flats, one decided to buy in the north the other in the east like Tampines, but 5 years later down then road, the one who bought and sold Tampines his profits doubles up and became richer as compare to the other friend who choose the north BTO flat.
Do you think this is unfair?
This created a gap between them in terms of investment profits after acquiring and selling off their first pot of gold between two friends who started investing in properties with the same income background though.
This further tells us the choice of property and its location is very important, that is why a majority of property investors will avoid the northern Singapore area.
Let’s say if the north can make money then am I right to say the rest of the parts of Singapore will make even more money?
Your first property definitely will make money, let’s say you have decided to go through the normal way which most Singaporean couple does, get married and settled for BTO flats that is the also a good idea too.
When the government sells the BTO flat to you, the price is also based on more or less that time of the property value and no matters how things turns out to be you still need to wait for 3 years for that BTO flat to be ready to move into and on top that another five more years to reach MOP to enable you to sell, that is a total of Eight years of your life, this long waiting time you are almost guaranteed to make money from this property investment. (You are actually exchanging future profits with your life) which is very fair and probably your this BTO flat your being first pot of gold will in most optimistic cases will make you richer by $200k to $300k by then.
Case study 2
Both friends who still single and not married have decided to buy into a Condo (it can be new or resale Condo, Freehold or Leasehold does not matter) this kind of buying method we call it Single’ scheme, which one party uses his CPF money and combined with the other party using cash.
Both invest in the same condo and jointly owning or co-owning together, doing this solely for investment not for own stay, optimistically eventually after 3 years from date of official purchase they can choose to sell it off and make a handsome profit and part ways to further to their own goals in life individually.
For adopting this Single’s scheme crucially my advice is that you should avoid buying resale HDB flats
RESALE CONDO is fine but RESALE HDB FLATS are totally NO!
You may be shocked to know if I tell you there is a new normal that is still happening out there that in fact many Singaporeans and also clients whom I personally know are actually losing $50k – $100k because they have invested a resale flat and if they are to sell their flats currently, they are likely to lose this amount
These scenarios are getting more and more common now, is not common last time. It is sad to see this.
Just imagine you bought the resale flats around $400k and now you stand to lose $50k-$100k if you sell it now.
In summary to avoid being caught in this entrapment, my suggestion for your first pot of gold you can go for the single’s scheme method and invest into a new launch condo solely for investments not for own stay or just simply get married and buy straight from HDB brand new BTO flats.
RESALE CONDO is fine but RESALE HDB FLATS are totally NO!
In summary why real estate investment in Singapore will still remain a safe and preferred means of investments in growing one’s wealth .Here are some keys points to assure you that for any property own in Singapore, there is always a buyer looking out for it to buy.
Here are key reasons why
Singapore Properties remains in demands mainly because
-An investor wants a safe haven for his investment in the longer run.
-Singapore education is one of the top in the world.
-Singapore is eyeing to be the top “medical hub” and “smart nation” of Asia / World in next 10 years. This alone creates huge opportunity for rental market and property growth
-Singapore is ranked top in “global information technology” and each home enjoys fibre
-Singapore has the highest penetration of mobile technology in the world.
-Singapore has straight forward rules on money going in and out of the country.
-Singapore people enjoy complete e-governance and e-banking.
-Singapore is ranked the world’s top country in ‘ease of doing business. It’s a very pro- business environment with a clean straight forward tax structure.
-It has a clear cut government supported plan of growth chalked out until 2030
Capital gains tax in Singapore is “zero”. Yes Capital gains are NOT taxed in Singapore,
making it an investors haven.
-These make it a ‘desired destination’ for educated people and affluent business people.
Let’s point out why "Singapore Property prices will continue to climb in the future to come”
Singapore provides the ‘safe heaven’ and ‘growth’ an investor would expect due to below.
• The government has very strong plans, the money and implementation skills and
experience for growth of Singapore.
• The government will ensure property prices will continue to rise because:
• It allows Singaporeans to invest their CPF into their property
• Most Singaporeans own a property (More than 90%)-the highest in the
• Government ensures Singapore will be the top destination to attract talent &
Many Richest OF The Rich have invested in Singapore.
• The only factor is to take care of few months when the property may not be on
rental, this can be treated as forced savings too!
As of today foreigners are able to invest in Singapore, rules may change and it will be a lost opportunity
So be fast in making this decision as your first pot of gold is waiting for you.
Felix specializes in real estate exclusive listings, digital sales marketing and leases.
A trusted consultant to many successful property owners, perhaps the most compelling testament to his success is himself – through strategically analyzing the market and well-calculated investments, he already owns local and overseas properties
Today, as a property consultant of one of the largest real estate company in Singapore, Orangetee and Tie Pte Ltd with a reputable track record, I wish to share my strategies for financial freedom with you.
I hope to help you put in place a secure retirement plan and enjoy the lifestyle you have always desired.
To start with, I can help you identify a good value investment in today’s market. Also, I would like to advise you on the best ways of financing your property.
For instance, is paying your bank loan a good or bad debt? Also, I can help my client unlock the maximum loan from the bank even though they have a car loan.
With the proven strategies from my team, I am confident of putting together a customized and exclusive retirement plan that can set you on the road to your Financial Freedom!
I graduated a Diploma in Mass Communications with a passion for video editing and graphic design and website designing.
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