Property Investment Singapore | TheFinLens


Property Investment Singapore | TheFinLens

Presently property investment Singapore is beneficial for all those looking to make some good money of the funds available. This way of growing money in Singapore is most popular. As known, Singapore is considered one of the top destinations for investing in residential properties.

  1. Rental Income:

There are multiple places in Singapore which are perfect if you are looking for rental income of your property. This is where investment property works well. You can look for property which is close to the city center for beneficial yields. You need to consider buying property in transit-linked developments which are integrated. These are developments which have direct access to MRT and also have commercial components. This rental income can be helpful in offsetting the mortgage and help you in building equity for your investment. With the yield being on the ‘higher’ side you can pay off the maintenance fees along with the mortgage.

  1. Boosting Returns with Cheap Leverage:

Investment property helps you borrow a huge sum of money at a low rate of interest for buying the specific house. With the rise in the price of the specific property the return on the invested money is multiplied.

This works well even if the prices fall initially. All you need to do is have patience as this will definitely rise in the long run. You have to ensure you buy the right property at the right time.

  1. No Tax on Capital Gains:

With the appreciation of the price of the property you are not charged with any capital gains tax even if you sell this at a huge profit. You need to know that almost 20% of your earnings go to the tax man with the regular office job.

Considerations for Property Investment in Singapore:

Now that you have decided to invest in property in Singapore it is important to consider specific factors before you take the plunge.

*Rental Income for Installment:

The rental check coming in every month helps you in repaying the loan you have taken for property investment, Singapore. You need to be aware that there are various different expenses involved when investing in real estate. Some of these are

  1. The property tax which is progressive which can increase from 10% of the value of the residential property to nearly 20%. The estimated rent of the property for one year is the annual value and this is determined by the market rental for properties which are similar and is not dependent on the actual rent received.
  2. Income tax needs to be paid on the rental income. As this tax can be almost 22% you need to be ready to part with funds to the tax department.

There are specific concessions which can be worked out. The property tax which is paid, the housing loan interest and a few other expenses can be reduced from the rent for computing the income which is taxable. Besides this, you will have to pay the fees of the property agent, costs of maintenance and expenses for insurance.

*Right Timing:

Property investment, Singapore tends to work well when buying a property and not selling it. You need to ensure to buy property at the right time, that is, when the prices are low. The only way out is to ensure you are in no hurry to sell the investment as the trend of property price is definitely positive. It can take some time for the prices of property to appreciate.

*Illiquidity with Property Investment:

Property investment might work in the negative if you need big amounts of funds for any sort of emergency.  For the immediate requirement of funds, it is advisable to invest in stocks or a bank.  Besides which, property investment, Singapore can work out a little costly as you need to pay the fees of the property agent, insurance and other fees. Before you decide on property investment it is necessary to ensure you invest only that much which will not be required in the immediate future.

*Commercial Property or Residential Property:

As compared to residential property, investing in a commercial property works out more benefecial. For a residential property you might get 2 to 3 % but for a commercial property you can get almost 4% more.

With any changes in the market, there is a possibility of low rents for the commercial property. You also need to look after the maintenance of the office space. This is on the lower side with residential properties.

*Selection of investment Property:

The most crucial factor to be considered for investment property in Singapore is the selection of the property. This works out to be a commitment on a long-term basis and needs patience, time and a lot of consideration. Before you invest in any property you need to consider

  1. Location as this can make a huge difference to your gains. Commercial property needs to be in an area with other commercial complexes and the area needs to be considered busy, while a residential unit needs to be located in an area which has the required amenities and probably a school, a hospital and some market place.
  2. The lease of the property which can determine the age of the specific property needs to be taken into consideration as this tends to affect the price of the property. The selling price of landed properties is lowered as this required costly maintenance. Conversely, the asking price of a property which has been renovated recently tends to rise.

Finding Property for Sale:

For finding the investment property in accordance to your specific requirement you can surf the different websites offering multiple choices. You can also look out for sale launches which are held by different developers before construction. You can go through the mock-up images or models of the property.

The process of purchase for an investment property which is unfinished can take longer and you need to make the payment in stages when this is being built.

As a wholistic financial planner, I work with my partner (Jia Junn(JJ) , a professional real estate agent) , in giving a portfolio review on your financial portfolio for your asset progression. Should you be looking for a property be it Resale HDB or Private property, we will be able to recommend you based on your best interest and needs. Do contact Jia Junn(JJ) at +65 86879387 should you be open to looking at getting a property at the best valued price today or investing in one or multiple properties for your wealth accumulation and progression.

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