So You Are Still Hoping For The Property Market To Go Down By Another 10%. Do You Know What It Takes?

Still hoping for property market to decline by another 10% -

With the eight rounds of cooling measures, the property market has retraced southward by 10% and showing signs of a bottom. If you are still hoping for it to go south by another 10% or even to 2009Q2 level, do you know what sort of events can cause it to happen?

Here are some hypothetical events that are essential to make that happen.

  • New cooling measure adding on top to the existing 8 cooling measures
  • Direct foreign investment withdrew – more companies leaving Singapore for another country, severe oversupply of properties to let
  • Singapore unemployment rises to double digit – more people unable to repay their mortgage
  • Fewer developers bidding for Government land sales resulting in lower successful bid for land prices
  • Sustained increase interest rates – unlikely but if it happens buyers will need to pay more for monthly mortgage
  • Fewer attractive new private condominium launch that cannot be missed – leading to oversupply of unsold properties
  • Smaller property developers reduce price point to reduce penalties from unsold completed units
  • Lower transaction volume from a reduction of qualified buyers or sellers
  • Rising tension and instability geopolitical situation in the south-east Asia region repelling investors to channel their funds elsewhere
  • When terror threats slip through Singapore’s multiple layers of firewalls
  • and many more.

Now, do you still think the property market can go south by another 10%?

If you think so, when would that happen? Share with me.

 

 

The Only District Investors Should be Focusing This Quarter – District 10

property prices rebound in d10

If you are looking to invest in a new condominium with strong capital gain potential, this is the only district you should look at – District 10.

D10 to be monitored
Source: squarefoot research

Prices in this district has hit the long term price ceiling in June 2016, and July is a critical month to watch to confirm if this uptrend is true or merely just a dead cat bound.

This uptrend is a result of strong sales from 2 high potential development – OUE Twin Peaks and Gramercy Park. With the well staggered sale by batches, this uptrend can be sustained by the remaining units of these 2 development for another quarter or two and possibly triggering more purchases in upcoming projects when more investors decide to hop on to this bandwagon in D10.

If you have your finances ready to place your chips, D10 is certainly an opportunity not to be missed.  Contact me today to find out more.

You Need LUCK in Real Estate Investment

you need luck in real estate investment (1)
You Need LUCK in Real Estate Investment

Investing in real estate is not as straightforward as you may know. It requires astute approach to ensure the huge sum of money allocated is well-planned for maximum returns within your financial capability. Here are four aspects that can help you make better decisions.

Leverage

  • Financial and mortgage optimization

Take time to understand your current income and spending patterns. By understanding your total financial health, you will then be able to measure your financial stability, decide your risk appetite and strategize the best approach to achieve your goals. Whether or not to max out your loan limits to buy the most expensive property you can afford depends on the strategy you are using and which phase are you at in your real estate investment journey.

  • No man is an island

Leverage on the expertise of the professionals around you but always remember to reward them accordingly for the services they render. In the long run, it is more costly to pay less then to pay more. Also, always maintain your network such that you are in the loop when there are closed door deals. Join an interest group or set up regular meet up with friends alike.

Undervalued

  • Buy only undervalued properties

Sellers in the market place have gradually accepted that selling at a loss is the new reality and most wait no further to offload their underwater property to lighten their financial burden.

The edge property provides free copy of pull out every Monday which contains information on the biggest losses property transactions for that week. You may search for the same development to find remaining sellers who are also letting go at bargain. If there are no listings in the same development, the recorded transaction may be a unique case of overpriced purchase mistake done by one individual rather than the estate being overpriced when it was launched. For such distressed sale, unless you are in the circle, you probably won’t receive such information.

  • Don’t buy with emotion

Do understand the reasons behind those record breaking sale of premium HDB. Do not be a victim of inelasticity of supply.

Create Value

  • Maintenance & Interior design

Well maintained furnishes and unique design themes will certainly command for a premium when the time is ripe to sell. Doing up a good quality renovation and good preservation will serve you well in the long run. Furthermore, simple maintenance furnishes keep cost low, if you are letting out your property, to achieve a higher rental yield.

  • Showcase the value of your property

Sell the value of your property to buyers who appreciate this value. By staging your property well will highlight the value of your property to potential buyers who appreciate it. This cost about 1% of the purchase price which could generate an additional  8-10% proceeds (a.k.a. capital gains).

Key Location

Checkout this Strait Times tool that highlight the private residential projects completing in 2016 / 2017. Also, do not forget to use your natural senses to detect signs of redevelopment.

  • Accessibility

Buy anywhere along the current and upcoming MRT tracks will never be wrong.

 

The above are basic principles of real estate investment to kick start your adventure, always remember real estate investment is a marathon. Start early and pace yourself well. Best of luck to you!

4 Phases of Real Estate Portfolio Growth

4 phases of property investment growth 6
4 Phases of Real Estate Portfolio Growth

To be successful in real estate can be pretty simple if you adopt these 4 phases of portfolio growth as a framework to decide on your next property move. Let me briefly elaborate the on each phase.

Build

  • Finding the right first property
  • Maximizing leverage
  • Start early in your 20’s

Grow

  • Finding the right second property
  • Portfolio optimization
  • Exit strategies

Diversify

  • Introduce other types of real estate
  • Expand into other financial instrument

Distribution

  • Estate planning
  • Wealth distribution

Adhering to these following simple guidelines will not only give you a head start but minimize unnecessary mistake which could either cause you to fail or achieve much less.

golden rules for property invesment 1

Real Estate Investment is a Marathon

Real Estate Investment is like a marathon (2).jpg
Real Estate Investment is a Marathon

Looking back on completing the 2XU half marathon (21 km) two weeks ago, it somehow appears to me that running a marathon is just like investing in real estate. It requires preparation, partnership support, sound strategy and most importantly a strong mindset. Now who says running a marathon or real estate investment is easy?

Physical & Mental Preparation

Physical Fitness

The obvious goal for signing up a marathon is simply to complete the run by running it, not walking it. For most busy working adults, this requires a certain level of physical training commitment to ensure that our body is fit enough to complete the run. But do you need to clock the full 21 km to be considered fit to complete it? Not really. Personally, I only clocked a 12.5 kilometers prior to the marathon.

Similarly for real estate, do you need to have two or more properties under your name before you can start real estate investment? The answer is obviously – No. It has to begin even before you purchase your first house to ensure you start off with the right footing.

Mental Goal

For many participants, an important reason to join any organized race is to remind yourself how strong your mind is. This can eventually be a great confident boost in all aspects of your life, knowing that you are able to focus on your goals in spite of great physical discomfort.

As for investing in real estate, your mental strength will certainly be put to the test. You will face emotional struggle on making certain decisions that may sometimes go against what the crowd is doing. The key in getting through such challenges is to have a well-defined end goal. What’s yours?

If you do not have one now, I would recommend you to consider this: to be debt free and your only job at retirement is to collect rent. 包租公/包租婆! (bao zhu gong/ bao zhu po).

Consistent Pace

A pacer plays an important role in a marathon by setting a consistent pace for other runners to follow and stay with the pacer throughout the race. This pace should be challenging such as it pushes the runners to stretch themselves and ultimately realize their goals. Identifying the right pace and pacer have to be done well before your race because setting off the wrong pace might cause you not to achieve your goals.

In real estate investment, finding the right pacer who can provide you the right pace is the toughest of all and you might have to experience a few before settling down to one. The right real estate agent will be able to identify the optimal pace for you to stretch yourself (but not to overstretch) to realize your goal earlier and with greater satisfaction.

Adapting to Changing Environment

The terrain in a marathon just seldom constant, there are uphill, downhill or even small path that creates a bottleneck. We have to adjust our running accordingly to ensure that we can get over it in the best manner. On uphill, we put in extra energy to ensure that we do not slow down; on downhill we open up our strikes to take advantage of gravity; on a small bottleneck channel, we take the opportunity to catch our breath.

On the other hand, when we are looking at real estate investment, there are times of booming markets where buyers are rushing in to buy and push up the prices. There are also markets slowdowns where surplus of supply is pressing the prices downward. Furthermore, there are new regulations to tighten the eligibility to purchase which forms a ‘bottleneck’ situation such that only the eligibles are allowed to go through the narrowed path. Hence, adapting to changing environment by being versatile to apply different strategies for different market conditions is just part of the marathon.

Necessary breaks

In a marathon, there will be water points set up at every 4 kilometers, but that doesn’t mean that you have to hydrate yourself at every station. Most races have the flag off timing at or before 5 am for a good reason to avoid the sun as much as possible. In order to maintain our pace and to clock in more mileage early, I saw many runners skipped the first 2 stations just as we did. Subsequently, we had to hydrate ourselves more frequently especially when the fatigue started to kick in.

Same for real estate scenarios, when you are young or in the early part of property investment, you have put priority on clocking in more capital appreciation by leveraging efficiently and to avoid any unnecessary cash leak by spending on luxury products. There will be time when circumstances allow, you may decide to take a break to pamper yourself and your family with reasonable amount of luxury experiences. Thereafter, it is the best time to reorganize your footing and continue your adventure.

Final Stretch Endurance

Nearer to the end point, there are more runners started walking or ended up in cramps when they stop for rests. It is the toughest for our minds as our body has reached it limits and it is now subjected to individual’s mental endurance – mind over body.

So how is endurance related to investing in real estate? The subject of real estate gets more complex nearing the end of a transaction closing as the sheer amount of work, such as legality and financing, increases exponentially and turn many individuals away. This usually happens when they are already so close to clinching the bargain or the fruit of success. Feel like giving up? Fret not! If you have a good real estate agent in your circle, his expertise will simplify all these for you and I am sure he is more than willing to help you.

Humble Victory

Upon crossing the finish line, most runners must have felt the outpouring sense of satisfaction and success. You have done it! Many do not go screaming out their achievement to their friends, but rather quietly congratulating himself and perhaps have a simple treat for the well-deserved tired body.

This scene can be seen in the real estate arena as well, we do not see winners going around screaming out his huge profit, but rather most successful investors stay low, have a humble victory and perhaps a little celebratory meal with their loved ones.

Repeat

Well done! you have achieved great result this time round. So what’s next? It doesn’t matter if you have done it right or wrong, what is more important is what you do next.

Let’s say you have outperformed yourself and you did not slow down or gave up when your body is breaking down. How are you going to leverage on this new strength in your life? If you have no idea, those who are less performing will one day catch up with you.

Linking it back to real estate investment, now that you have successfully closed a good deal, how are you going to monitor and sustain this good work or to repeat it for another investment?

How many real estate marathons do you want to run to achieve your end goals? Can you sustain and continue the good work to achieve the same result? Have you found the right pacer that can pace you throughout these marathons?