Property investment in Singapore is still the top choice of investment

Tuesday, August 01, 2017

Property Investment In Singapore


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Many people are make extra money from various kind of investments nowadays. Be it stock investment or property investment. Keep an eye out on the Singapore property news and you will find loads of rags to riches stories from property investment. However, some people may think that property investments in Singapore are not always a bed of roses and sometimes, it requires some luck sometimes. Those that have been in the property investment in Singapore are those that have kept up with Singapore property news to enhance their knowledge on the market trend. There are articles out there for you to refer to when it comes to property investment such as how to make money in real estate, making money from real estate investing and how to make money in the current housing market


There are a few terms that you have to familiarize with. First of all, flipping. The term flipping in terms of real estate properties is actually referring to people that purchase and resale a property fast to make a profit. People who do flipping in the real estates industry are the ones that live by the rule buying the property at a low price and selling them high in prices. For example, property investors in Singapore purchase future incomplete developments from certain property developers at a price that is considered low. Then, the properties that the investors invested in are expected to appreciate in their value over the years as they progress in construction until they are completed. When an interested buyer who is prepared and willing to pay the agreed price approaches the investor, the investor will then sell off the property to earn a profit.  


property investment in singapore, pelaburan hartanah, property in singapore, singapore, investment
credit to google

Bear in mind that this process is more than just flipping. In actual fact, the investor has to bear all entry costs such as legal fees, mortgage loan, stamp duty and holding cost such as assessment tax, quit rent, and etcetera, in order to buy properties in Singapore. Not forgetting, whenever the investor is selling his or her property in a period of lesser than 5 years, the earnings from selling the property will be taxed (RPGT) accordingly. Therefore, investor has to look out carefully when choosing a property to invest in and whether the estimated value of property would go beyond the amount of holding and buying the property.  


Next, rental yield. Rental yield refers to providing short term loan of a property to a possible tenant in switching for payments to owner of the property. Rental yield works in a way where investor buys properties in prime areas and then rent the properties out to possible tenants to earn extra income in terms of rental fees monthly. However, investors or owners will have to take care of the entry costs plus holding costs such as renovation costs, taxes, insurance costs, and etcetera themselves. Rental usually is a long term gain where it will take around 5 to 7 years to achieve a stable return from rental yield. Renting out your properties is definitely a great way to earn from your properties that have not had much value yet.  


Thirdly, cash out refinancing. Also known as re-mortgaging. This is referring to the reformation of the current loan into a brand new loan with added new trade such as interest rates, new maturity dates, or monthly payment. Next question. How does cash out refinancing work? I will further explain this by giving you an example as it would be easier to understand by giving you a case study. 


Cash Out Refinancing Case Study


Let us say investor X buys a property of $500,000 by engaging a mortgage loan that is worth $450,000, which is a 90% LTV ratio, from Bank A. 5 years has passed and the remaining loan amount is now $407,000. The initial loan amount is $450,000. Outstanding loan amount after 5 years is $407,000. The tenure is 30 years and interest rates is 4.0% per annum. Therefore, the monthly installment is $2,148.37. At the 5th year of owning the property, the property has appreciated to $750,000 in value. Investor X now decides to refinance his loan through Bank B with same tenure period and interest rate per annum. Therefore, Bank B will then be responsible in paying off Investor X’s outstanding loan with Bank A through new conditions. 


property investment in singapore, pelaburan hartanah, property in singapore, singapore, investment
credit to google


Normally, an investor will rent the property out to use the rental yield to balance of the monthly installments until he is capable to sell off the property to earn a profit. At the same time, the property is still appreciating in value. Therefore, at any time if the investor desires to terminate the mortgage payments, he can also do so by selling his property to pay off the mortgage loan and at the same time, will still be able to leave with a desireable profit. However, refinancing your cash might lead you to an increase of installments with a tenure of longer period. Make sure that you understand the aim of refinancing your property before you really refinance your current property. List down the pros and cons before deciding on whether to do a cash refinancing. That being said, you will also need to have a rock hard and strong strategy in order to support your finances in the long run.  


In conclusion, the above 3 ways of making money out of your real estate are enough to convince you that making money from real estate in Singapore is still a good investment option. However, do be cautious and refrain from making quick decisions according to unwanted and uneducated comments or suggestions given by inexperience people. Indulge yourself in the Singapore property news, do your financial planning and research ahead, self educate and experience it. Of course, with a tinge of luck as well to bring yourself a good investment. So, good luck and have fun making money from real estate in Singapore.  

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12 comments

  1. Good info kak azi ๐Ÿ‘Œ๐Ÿป๐Ÿ‘Œ๐Ÿป

    ReplyDelete
  2. good info about property investment in singapore...nice

    ReplyDelete
    Replies
    1. bolehlah tengok-tengok mana yang menarik

      Delete
  3. Kalau ada duit byk boleh consider beli property di Singapore sbg future investment. InsyaAllah mana tau ada rezeki kan.

    ReplyDelete
  4. Kita xfaham lg psl property. Hehehhe dok baca gak tp still xleh hadam.

    ReplyDelete
    Replies
    1. kalau berminat pelan-pelan cari info. Best kalau boleh involve dlm dunia hartanah ni

      Delete
  5. pelaburan dalam hartanah mmg menguntungkan, tp jauhnya sampai Singapore.. hihihi

    ReplyDelete
    Replies
    1. jengok-jengok dulu...boleh compare dengan tempat sendiri

      Delete
  6. nak beli kat Malaysia tak mampu lagi.. apa lagi Singapore... mampu tengok saja huhu..

    ReplyDelete
    Replies
    1. in sha Allah..kalau berminat mana tau satu hari nanti

      Delete

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