Why Singapore Property Investors Fail? 5 Reasons
One problem with property investment is that, unless you’re very rich and a big-time investor, it’s hard to practice. It’s not like small time fiddling with stocks, where you can afford to make several dozen bad trades before you smarten up. So for small time investors with, say, one or two places to let out, these common ideas can lead to irrecoverable mistakes:
1. High-end property is more resistant to downturns, because their location and amenities can’t be duplicated
This is one of those beliefs that are difficult to debunk, but it’s semi-true.
2. Property is the best investment because interest rates are so low, you’re “borrowing for free”
Again, there’s some truth to this. But you need to understand that for the past 10 years, Singapore has been in a very abnormal situation.
3. Property investing is very safe, because in a worst-case scenario you can always just sell the house
First, as we’ve mentioned in point 1, there are cases of negative sales (they’re just not well publicised). While it’s not common in Singapore, it’s not out of the question either; see for yourself.
4. Old properties mean higher rental yields
If you’re a seasoned investor, yes. If you’re new or a small-time investor, the complete opposite may be true.
5. Finally, given the short lease remaining, you have a limited time to recoup the cost of the property.
This all requires a degree of expertise in “reading” the property, which most new investors just don’t have; small time investors haven’t typically owned and rented out a dozen properties, and learned from many initial mistakes (they may not even be able to recover from the first one).
This belief is as true as you are experienced in property management.
So whenever you hear the merits of property investment being described, remember that most of it is only valid given a long time frame.
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Are you Investing or Gambling?
Property Investment is never about luck or emotional buying. On many occasions, we see consumers hopping from different new project show units just to find “the Right One”. But how exactly will this “Right one” presents itself in the face of consumers?
If you had answered “Ambience” and “Feel” of the unit, you are emotional buying. Many times, these feelings have clouded the analytical skills of the consumers, making them overlook other critical aspects such as the land appreciation, location, sensitive pricing/discounts and market sentiments. By the time when the consumers are prospecting for new house, they will themselves in situation where their current property is not fetching the desired price and they have missed the opportune time to enter the market.
Real investors are clear with their goals and what they want out of their property investments. They do not rely on hope that the market will one day, change in their favour. Rather, they are aware of the cycle and when to make the “Right move”.
So, are you an investor or gambler? If you are determined to be a savvy investor, you will definitely be interested in the following.
How do you Determine the Right Cycle, the Right Time and Right Price to Enter?
At the first, second and even third glance, you may not be able to figure out all the information which this chart is trying to convey. However, if you study in detail or with some guidance, you will be able to mark out a certain trend that is brewing in the market.
Based on this cycle, you can also identify the best opportune time and price to enter the market.
So the Question now is:
Is This the Right Time to Buy in Today’s Market?
Just understanding the cycle is not sufficient.
Here are the 5 Essential Elements which you Must Know in order to build Successful Investment Portfolio in CCR Segment:
1. What are the Impacts of the Latest Announcement of the Reduction in Government Land Sale?
2. Supply vs Demand
Should we buy when the supply is plenty in the market?
3. Location vs Entry Price
Which is more important? Many always think that buying a good location near MRT is the safest bet as it is easier to rent out. However, is that really true?
4. New Launch vs Resale Property
Are you aware which one is likely to drive higher profit margin?
5. How can we secure the First Mover Advantage?
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