Investing in property is the most certain way of reaping a fortune if you understand what you are doing. Almost anyone can engage and succeed in property investment. It does not require any kind of special training or qualifications for one to master the art. Speak to any property investor and you will be surprised to learn that most of them started small. You only need a steady job in addition to a little capital for you to begin investing in property. Do not be deceived by the myth that property investment is for the wealthy. Anyone can make their first pot of gold through property investment. Read along to know how.
Back to the Basics
The Singaporean real estate pricing for a residence tends to average at SG$15251 per square meter and will yield an average of 2.83 percent. The 2.83% refers to the rate of return on the cost of the residence. Simply put, this refers to the much you make annually when compared to your initial investment. This is a major consideration since what you get from the tenants is part of what reap from your investment. You will also get a return when you sale the residence and earn a profit.
The figures above do not necessarily reflect the exact amount of money you will spend or make from the purchase and sale of property. However, they give a rough estimate of the figures to expect.
Monitoring Price Changes
- To succeed as a property investor in Singapore you need to understand how prices change. Latest metrics suggest an average investment change in price at -3.67% within a year. This seems quite discouraging but it is wise to also know that the value of the residence increases by 1.72% after five years. The value of the property will further increase by 67.57% after another 5 years and that is a perfect time to sell.
- Another crucial factor to consider before you invest in property within Singapore is the type of ownership. This usually takes two forms; leasehold or freehold. As a Freehold owner, you have permanent rights to the property. As for leasehold, you are simply an owner for the period of your lease. You need to understand the difference between these two if you are thinking of making your first pot of gold through property investment.
- Taxes are also a major a consideration to investors. The Singaporean real estate market highly favors foreign investors, whether individuals or entities. A flat rate of 15.1% is normally charged on those that earn US$1500 to US$12000 monthly as landlords. On the other hand, the progressive tax on the annual property value varies depending on whether you live in it or not. There is an additional concessional rate of 4% for owner-occupied residences. Non-residents are charged an extra 10 percent on all properties. The value will also change with respect to increase in value. As for industrial property, rental property, and commercial property, a flat rate of 10% applies.
Choosing a Location
- Choosing the right location is mandatory if you want to succeed in property investment. It may look like it is a walk in the park if you have never invested before. However, choosing an ideal location is never an easy task. Singapore in particular is a small country and the value of property varies widely depending on the location. The most common form of housing in the region is the HDB apartment. This simply refers to a program sponsored by the state whereby Singaporeans get subsidized housing. In additional, Central Provident Fund (CPF) can also be used to buy HDB, new launch condos and resale condos. Unfortunately, you are not able to use CPF to purchase any industrial and commercial properties.
- Some of the most popular regions in Singapore for investors include Jurong West, Bukit Panjang, Bedok, Choa Chu Kang, and Sengkang. Bukit Panjang stands out from the rest when it comes to the most expensive property sales in the region. However, when it comes to the cost of renting, Cho Chu Kang, Jurong West, Tampines, and Sengkang outclasses Bukit Panjang. Bedok on the other hand stands out as the most expensive rental region.
It is therefore important to know your location before you even begin to invest in property.
Common Mistakes to Avoid
If you want to succeed in property investment, do not strive to be an average investor. The average investor employs techniques that are out-of-date and tend to commit various mistakes;
- Wait for the Perfect Time-for as much as it is good to invest when the time is right, there is never a perfect time to invest. If you are waiting for everything to be perfect for you to invest then you will never succeed in property investment. It is wise to invest in your knowledge then have courage to make an investment. As for all other things, you shall learn them along the way. Others wait until they know enough. This will never happen since there is a lot to learn and you can never know everything. Start with what you know and learn the rest as you pursue your goal.
- Lack of Patience – patience pays and it pays handsomely in property investment. Great investments take a long time to build irrespective of the amount of money you have. Those pro investors who understand property investment understand that property investment is a long-term investment. It is never ideal for those searching for a scheme that will make them rich overnight.
- Do it yourself – this is a common mistake that starters commit from time to time. If you want to succeed in property investment then you should begin to hang around those who are experienced in the field. Get a mentor and build a team of like-minded individuals to support you as you strive to succeed in property investment. You may also want to visit the showflats with like-minded property investors for relevant information. To kick off showflat viewing this 2017 and if you are staying near Clementi Avenue 1, you can consider visiting Clement Canopy showflat in the coming February 17. For those in the vicinity of Tanah Merah and Siglap, you can kick off your property investment by visiting Grandeur Park Residences showflat in Feb 17 and Seaside Residences showflat in March 17 respectively.
You can reap tremendous dividends from property investment if you comprehend what it takes to succeed in the field. Property always appreciates in value and thus it gives a sure return upon purchase. The Singaporean real estate market is huge and guarantees a good return on your initial investment. You only need to engage competent property professionals if you want to get the best of your property investments.