Are you thinking of snapping up the opportunities to invest in commercial property or industrial property?
Commercial property and industrial property have been regarded as a property investment asset that can generate higher rental yields compared to residential properties. The yields can be at about 4% to 8% – beating that of residential properties at between 2% and 3.5%.
Some important points you need to take note of:
- You will not be able to use your Central Provident Fund savings to purchase the commercial property or industrial property.
- You need to pay for the goods and services tax (GST). However, you can set up a company (subject to certain requirements) to buy the commercial property or industrial property, paying the goods and services tax at purchase and then claiming it back from IRAS.
In Singapore, as an investor, you must know who your end-users are and what are their needs and demands. Besides the basics of size, location, tenure and price, you should be careful of developments that do not come with the basic amenities and facilities and that fail to meet the end-user’s needs. To cater to investors’ demands, some developers even push out developments that come with condo-like amenities such as gyms and swimming pools.