While Singapore’s housing prices have slowed down due to a subsequent moderation in economic growth, the country’s real estate market continues to be a thriving and attractive investment for both local and foreign investors. Everyone in Asia and beyond recognizes and trusts Singapore’s institutions. It’s simply a liquid market and a safe haven for dire economic times.
Deciding where to park your hard-to-come-by capital can be challenging, especially for novice investors or foreign investors who have no first-hand experience in the local market. Here are three things to keep in mind when investing in Singaporean property.
Know What Drives Buyers Into the Market
Knowing the characteristics of your chosen market is vital to managing your positions during volatile times. If you don’t understand why there was a sudden spike in housing prices this recent week, you probably lack key research data. Be a smart, independent investor instead of following the herd or the investment recommendations of self-proclaimed experts and market prophets.
Basically, Singapore boasts superb infrastructure, stalwart transportation system, and an overall disciplined and well-educated community. Start your market research based on these key geographic qualities. Look at the latest Singapore property news for investment ideas and reports that could signal an impending trend.
How to Look at Properties
Successful investors know what to look for when viewing properties. Throughout the years, they’ve developed a mental template of what a property should have in order for it to be investable. On the other hand, novice investors tend to focus on multiple things and chase various leads. This ends up further confusing them and making the process more stressful than it already is.
When looking for properties, check the ownership first. Make sure you’re not wasting time meeting with the seller by making sure he/she legally owns the property and has the rights to sell it. You can ask him/her for proof of ownership, such as a title, deed, or bill of sale.
In some situations, the seller might be facing bankruptcy. Avoid getting into any form of legal discrepancy by requesting for a copy of a written consent provided by an Official Assignee, which basically indicates that the person can legally sell the property.
Recognize the Pros and the Cons
Buying an investment property, whether it’s single-family housing or serviced apartments in Singapore will presents risk. For instance, if you took out a variable loan to secure the investment capital for the properties, you could end up in negative territory once interest rates skyrocket spontaneously.
As an investment, a pitfall of buying real estate is that you tie up a huge chunk of your capital to a single property, which may or may not generate income in the long term. Try to diversify your portfolio by buying into multiple cheaper properties rather than put all your eggs in one big mansion.
Despite the risks of investing in property markets, Singapore’s favorable economic conditions make it a trustworthy incubator for real estate investments and help create a ton of potential upside if you approach the business in a disciplined way.