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August 11, 2022

How to say NO to Property Investment

 

Here are several reasons for you to turn down the prospects of property investment..

  • If you don’t feel the pinch with rising living expenditures
  • If you don’t mind servicing your mortgage loans late into your golden years
  • If you don’t care whether you can retire with ease or continue working when everyone is retiring

However, if you actually care about the above mentioned, then perhaps this article might just be able to pique your interest.

More than often, people underestimate their capabilities in real estate investment without even knowing what they are capable of. Because the greatest misconception when it comes to property investment is that it is a rich man’s game. Do yourself a favour and not allow these falsehoods to prevent you from attaining your financial freedom!

Another misapprehension is that investment properties are spare properties that you have the liberty of renting out. But did you know that your own-stay property can be viewed as an investment as well? With careful planning & considerations, your own home can be an investment into the future as well. Especially when your property appreciates in value and hence making it easier for you to upgrade to another home of an even higher value. Thus, snowballing your asset value.

Therefore, the consideration of your next property whether for own-stay or investment comes with even greater importance now. Because Singapore is such a good landscape for buying properties, if you have the skills to pick out the right ones that is. Let’s see why Singapore is such an excellent market for property investors.


Strong capital appreciation

Property buyers in Singapore enjoy strong capital growth from their properties as Singapore has such a robust and resilient property market. If you take a look at the chart above, even during times of crisis or uncertainties, the property market manages to excel its previous high, on top of a quick recovery.

Take for example you bought a 1,000 sqft property in 2019 at a price of $1,749 per sqft, and sell it in 2022 for $2,312 per sqft, you’ll end up with a tremendous profit of about $563,000 in just mere three years. Such profits are almost impossible to achieve through plain slogging & saving.

Attractive rental yield

Singapore has always been one of the countries known for its strong rental yield. Savvy property investors make full use of this attribute to earn themselves nifty passive income.


Comparing the same period as we did for property prices of the average non-landed private home sale price, rental for 2019Q2 was at an average of $3.29psf comparing to 2022Q2 where the average rental was at $4.05psf - a staggering 23.1% in just a short span of 3 years. We are already living in an era where rental cost is at an all-time-high.

Property as a savings plan

When people first hear of this concept of their property as a savings plan, they often find it difficult to comprehend. Because to most of them, a property isn’t cash sitting in a bank or a safe deposit. But who says that savings have to be money being stored in a depository?

When you buy big ticket items such as property, it’s almost definite that you’ll take out a loan. Instead of seeing your monthly mortgage repayment as an expense, it should actually be seen as savings. Ultimately, you are contributing towards owning the entire property, which is an asset.


The trick in maximising your “savings plan” in that sense is to upgrade your property as much as you can so that later in life when you’re on the brink of retirement, you are left with a property of the highest possible value. That way, you can decide whether you want to continue living there or if the need arises, right size your home to have a huge sum of money tiding you through your golden years.


One huge perk of engaging consultation services of any PropNex associates is having their proprietary financial tools that can assist you in planning well. The tools help you map out your finances easily and provide a vote of confidence to any first-timers, upgraders, or investors looking to take their next step.

You might want to speak to any of our PropNex associates to see what’s achievable for your situation as it differs from client to client.

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