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

Want to invest in property in Singapore? From maximizing profit to picking the right investment property to buy and calculating rental yield, learn about all about Singapore property investments here.

Singapore is home to hundreds of millionaires, both local and foreign. For many of these businessmen, investing in Singapore’s property market 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 investment 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 property? This article will cover five topics, all of which are linked to investment:  

  1. Singapore’s property market
  2. How to invest in property in Singapore
  3. How to calculate rental yield (gross vs net)
  4. How to maximize your profit from a property sale
  5. Where and what you should invest in


Overview of the Singapore property investment market

What has led to the fluctuating popularity of property investment - PropertyGuru Singapore

What has led to the fluctuating popularity of property investment?

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

Then came the problem; the 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 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. 

You can read the following articles to learn more.


How to invest in Singapore property 

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. 

Read more about these restrictions here:

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.


How to calculate property rental yield

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

Gross rental yield 

The first, known simply as rental yield (or gross rental yield), is calculated by measuring the annual profit of your property rental as a percentage of the property’s total value. 

For instance, if you have a $300,000 property and you charge $2,000 for rent each month, your gross rental yield would be ($2,000*12 / $300,000)*100% = 8%. 

Net rental yield

Of course, there are other things to consider as well, such as the expenses incurred while the tenant is living in the property. Bills and taxes are also paid for by the owner, all of which reduce your profit. After taking all these expenses into account, you would be left with what is known as the 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.


How to maximize profits from a property sale

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.

The amenities surrounding your property can influence its value as well - PropertyGuru Singapore

The amenities surrounding your property can influence its value as well

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.


Where and what properties should I invest in?

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 a bit more on where and to invest in, you can check out the links below.


More FAQs on property investment in Singapore 

Is real estate/property a good investment in Singapore?

There is no straight answer to this, but property investment is very popular in Singapore. Compared to stocks, it is less volatile.

How can I make money from property in Singapore?

You can turn a profit if you "buy low and sell high" (i.e. capital appreciation) and/or earn rental income from having tenants. You can also buy REITs, but that's another thing altogether.

Can foreigners buy property in Singapore?

Foreigners can buy private non-landed property (condos), but not landed property and not HDB flats. Singapore PRs can buy HDB resale flats and may appeal to buy landed homes (both subject to eligibility conditions).


For more property news, resources and useful content like this article, check out PropertyGuru’s guides section

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