Property Investment in Singapore: How to Get Started, Calculate Rental Yield and More

Singapore is home to hundreds of millionaires, both local and foreign. For many of these businessmen, property investment in Singapore has proved to be rather lucrative throughout the years.

Property investment in Singapore is so lucrative, in fact, that prices for homes have increased to the point where the government has seen fit to step in. Cooling measures have been imposed to ensure that homes remain affordable enough for citizens to live in.

With Singapore doing what it can to curb the rise of property investors looking to make a quick buck, it may seem like property investing is a bad idea nowadays. However, there are more ways to earn money than simply buying and selling property.

Itching to learn the many ways you can invest in real estate investments in Singapore? This article will cover the basics you need to know when it comes to property investment in Singapore.

Singapore’s property market has been quite lucrative for property investors in the past. Prices of properties could rise very high, and buyers would still snap them up. This caused a chain effect among property investors: “if people are willing to buy at high prices, I can sell them at high prices as well.”

Then came the problem: Rising prices meant that Singaporeans could no longer find suitable housing for themselves without breaking the bank. Their choices were to either relocate, or hope that a new investor would price their property at an affordable sum.

In a bid to halt the soaring prices of homes in Singapore, the government developed several laws and countermeasures against property investors. Their aim was not to bring down the prices of the properties, as doing so would only lead to a greater surge in investors. Rather, they wanted to stabilise and moderate the sales cycle, making it harder for property investors to turn a profit.

Despite this, foreign property investors are still turning to Singapore for their property investments. This is due to the fact that it is safer in Singapore than anywhere else in the region; Property prices will not fluctuate that much in response to political unrest.

Property investment remains one of the favourite investment methods for many Singaporeans, as you can invest long-term without worrying about short-term fluctuations. However, with the implementation of cooling measures, purchasing property has become more expensive than before.

You have to take into account the added costs of the restrictions and cooling measures. These include things such as the Additional Buyers’ Stamp Duties (ABSD), and Total Debt Servicing Ratio (TDSR). For example, Singapore citizens purchasing a second property have to pay an ABSD of 12%, and an ABSD of 15% for their third and subsequent property. Also, under the TDSR framework, the sum of an individual’s loan repayments (housing loans, credit card debt etc.) cannot exceed 60% of income.

For HDB upgraders, you should know that there is also a remission period for ABSD. The remission period of 6 months means that, if you sell the first property within six months, you can get a “refund” of the ABSD that you incurred.

Fortunately, there are more ways to invest other than the buy-and-sell route, which requires waiting for an increase in property value. In Singapore, a high rental yield can net you a decent sum of passive income through rent alone. This allows you to reap a profit while still mitigating the tax costs.

If you want to learn more about getting into investments, the following guides will put you in a good place to start.

There are two predominant forms of rental yield: Gross rental yield and net rental yield.

Rental yield is important if you intend to make a profit as a landlord. If you’re interested in renting out a home, here are some of the condos with the best rental yields in Singapore.

Once you are ready to sell your property, it’s important to think of how to maximise the amount that you can earn. One of the ways to do so is to conduct your property’s valuation, which will take into account its age, location, and number of rooms, among other things.

There are many ways to increase your HDB’s value. For example, you can opt to repaint your house, remove all the clutter, or repair any leaking parts. Although they might incur a small cost, these issues, if not dealt with, may cost you an attractive deal.

Take a look at these articles to learn how to maximize your profit from a property sale.

A useful place to start looking would be to study URA’s Master Plan. The Master Plan will give you an idea of upcoming developments in different parts of Singapore.

After that, you have to consider your own finances, and plan around the best type of property that you can afford: most Singaporeans usually plan around BTOs, ECs, and resale HDBs, as they tend to be more affordable.

To learn more on where and to invest in, you can check out the links below.#

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