Three Pronged Strategy To Passive Income
STEP ONE - Make Money In Singapore
Or more like Make Singapore Work For You! I mentioned how I made profit from an old HDB flat years ago. This is what I really mean: Make Money From A Property In Singapore. and then reinvest that money to make Passive Income to fund your financial freedom.How did I make Step One work for me? Some of the property profit was plonked into an investment property which I still rent out for passive income to this very day. This rental - even after deducting the mortgage, allows me to pay for my mortgage in Malaysia, and then some I also used some of the HDB profit to buy a small investment condo in Thailand, which is also rented out for some living expenditure (I say "some" because it is low compared to the handsome rental you fetch in Singapore).
So again, I advise all who are thinking of buying a property to seriously start thinking (and buying) now - before Singapore and the world's economy turn around. My experience tells me that when the Singapore market turns around, it is quite nimble due to the size of the market (just as it turmed downwards rather quickly with every global downturn). Be it a HDB or a private EC or condo - they will be your ticket to financial independence in the future.
I am sharing here some details of when I bought my first investment property in Singapore back in 2009. I saw a good opportunity and jumped into it. Just to give you a hint of the buying frenzy 5 minutes before the 2:00pm booking closing - you only need to watch the video below! It is like a mad house with people pushingthrough to put in the cheque. We managed to put in ours at 1:59pm....literally in the nick of time and had never looked back since.
THE GOOD OLD HEY DAYS OF PROPERTY BOOM
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| Long Queue Just To Give A Cheque To Qualify For A Q Number to Enter Showroom |
Just for potential buyers to present a cheque as expression of interest outside the showroom saw an amazing crowd. You know it is desperation when agents were collecting cheques written on chairs, at carpark, and as far as in nearby Ikea and Anchorpoint foodcourt! I remember at that time. many friends were advising us not to take the plunge as the market was not as buoyant as they think it should be. But that was exactly why I made the plunge - I felt the market stirring then, even though it was not exactly what a realtor thinks as a hot market. And my thinking was, I would not want to jump in when the market was hot as it would mean paying top dollar. So jumping in when the market is just stirring is kinda like the old adage "an early bird gets the worm"? And reaped some did. I know of some buyers of Alexis who bought at S$1000+ psf like me, and let go of their units 2 years later before TOP at S$1900+ psf. That was a whopping S$900+ psf gross profit. So if I they had bought a 500 square-foot shoebox unit like mine, they were laughing to the bank with S$450000+ profit!
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| SHOE COUNT as benchmark for a property launch success! |
The queue (above) was horrendous in the sweltering heat, but the interior was nicely done (below).
What I am trying to drive home here is that we need to make the jump with a lon-term Passive Income in mind. Make the purchase when the market is beginning to stir - and not when it is red hot which would be too late to catch a bargain price. When it is beginning to heat up, you may not have prices at rock bottom, but the slightly higher price you pay will reap you years of passive income later. When you jump into a red hot market with everyone buying, you end up paying top dollar. And a high-price purchase may come back and bite you in once market dips in the future, which is when banks come knocking on our doors for cash injection should our property values fall short from a depressed market valuation. I have seen a friend's property get foreclosed due to his inability to top up cash to keep the property's bank loan going, and it's a sad scenario which I would not wish upon anyone.
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