property investment singapore

3 Successful Strategies to Property Investment in Singapore

For decades now, property investment has stood strong as one of the most popular methods of investment in Singapore – and there are several reasons why. Keeping a close eye on property prices and buying and selling property can yield high returns, while purchasing rental properties can earn you a regular rental yield in the form of passive income.

But whether you’re looking to buy your first Singapore property, or you’re a seasoned investor looking for a second or third investment property, it’s important to do it right. This means understanding Singapore’s property market, property tax, and related laws, as well your individual property investments goals and mortgage interest commitments.

There are three key paths you can take toward a successful property investment in Singapore – flipping properties, managing rental homes, and property investing in Real Estate Investment Trusts (REITs). In this guide, Instant Loan will explore all three.

Strategy 1: Flipping Properties

Buying and selling a property in Singapore quickly with a view to making a profit – also known as “flipping properties” – was an immensely popular method of property investment in Singapore in the mid-2000s. Despite recent changes to the law designed to limit these kinds of real estate investments, it remains popular today, too.

The basic idea is to keep an eye out for a good investment opportunity by closely monitoring the real estate market. When housing investments that represent good value for money rear their head, the “house flipper” needs to make their move.

There are three main strategies you can follow, which are:

1. Buying a competitively-priced home in poor condition and restoring it before you sell.

2. Purchasing a home and relying on capital appreciation, whereby the market value of your home rises over a period of time.

3. Securing an Option to Purchase (OTP) and transferring this onto a higher bidder as quickly as possible.

Pros and Cons – From Finding the Right Property Prices to Property Value Fluctuation


  • Flipping properties can be profitable if you monitor the market well, spot a good opportunity and are able to secure a low buying and high selling price.
  • Refurbishing and selling property in Singapore can be a fun and rewarding project.
  • Property investors may be able to pass Seller’s Stamp Duty (SSD) onto the additional buyer by transferring their OTP quickly.
  • Real estate is almost always a good investment, due to high demand for homes.


  • House flipping is reliant on capital appreciation (i.e. property values increase over time) which is out of the investor’s control.
  • Making intensive home improvements or repairs before you sell could eat into your profit margin considerably.
  • You may need to sell the specific property you are flipping within 14-30 days if you don’t want to be liable for SSD, while existing property owners may incur Additional Buyer’s Stamp Duty (ABSD).
  • Flipping property in Singapore can be difficult if you don’t have exclusive access to contacts in the real estate market.

Is This Property Investment Strategy for Me?

Whether you’re buying a home to refurbish and sell, relying on an uptick in the market, or trying to flip a property as quickly as possible by transferring the OTP, there are several things you need to consider.

Financially speaking, you’ll need to think about affordability, including whether you require housing loans or mortgages, as well as your overall budget – and whether renovations might impact your profit margin.

Legally, you’ll also need a good understanding of the Singapore property market, government cooling measures, as well as your responsibilities in terms of contracts, monthly mortgage obligations, tax and capital gains. This means that having contacts in the sector can make things much easier, as an advisor can always walk you through the process.

Every good investment has its limitations. Relying on an uptick in the market to make a profit might not always go according to plan. Existing real estate owners buying a second or third property may be hit with ABSD. Similarly, investors hoping to transfer an OTP to a higher bidder could result in incurring Seller’s Stamp Duty (SSD) if they are unable to transfer the OTP within 14-30 days, posing another regulatory burden.

Ultimately, flipping one or multiple properties is not for the faint of heart. You’ll need to act fast, know the market, stay within budget, and have luck on your side to be successful.

How to Get Started with Flipping Property

If you feel confident that flipping residential property is the right property investment strategy for you, there are several things you can do to get started, such as:

  • Get your finances in place by applying for mortgages and other financial products.
  • Begin researching the market to identify upward trends and potential investment opportunities.
  • Start speaking to real estate agents and using websites such as PropertyGuru and STProperty to see what’s on the market – consider residential property auctions too.
  • Calculate how much money you may need for renovations and/or stamp duty payments and find out which Government cooling measures or stamp duty costs may affect an investor in your unique situation.


Strategy 2: Renting Out Properties

Many Singaporeans are active buy-to-let landlords who benefit from the ability to earn rental income every month. You could be one, too, but there are several things you’ll need to be aware of beforehand, from the different rules affecting who can and can’t rent out different residential property types, to the pros and cons of being a landlord in 2022.

This path toward property investment starts just like flipping properties. First, you’ll want to identify attractive investment properties in desirable locations with lots of nearby amenities – but instead of buying them to sell on, you’ll be looking to secure a stable rental income or rental yield by letting them out to tenants after purchase. Let’s examine the key pros and cons of doing so.

Pros and Cons – From Setting the Right Rental Property Value to Finding a Good Tenant


  • You can earn passive income every month and put this toward your mortgage payments and personal profits.
  • Renting out property can be very lucrative in the long term.
  • There’s always the option of selling your property if there’s a market uptick or you change your mind.


  • Rental income isn’t always stable and there are limitations on what you can and can’t do if your tenant won’t pay.
  • You may need to seek approval or meet a Minimum Occupation Period (MOP) to rent out an HDB flat.
  • Finding a reliable tenant can be difficult, while disputes can escalate quickly and prove costly and stressful.

Is Renting Out Properties Right for Me?

There are several important things property investors should consider before plunging into the rental real estate market – as this kind of property investing will not suit everyone.

From a financial perspective, you’ll need to ensure your rental income exceeds your monthly mortgage payments before you can turn over a profit. Equally, it’s important to have some spare cash set aside to cover the costs of any potential renovations and repairs. Generally, you’ll want to aim for a gross rental yield of between two and three percent and look to pay off your mortgage as quickly as possible so you can turn over a pure profit.

Don’t forget that if your rental home isn’t your first property, you may also need to pay ABSD, as your rental home will be classed as a second property. If you’re a Permanent Resident or a foreigner in Singapore, you might even incur ABSD on your first real estate purchase. This tax is incurred on property transactions as follows:

Buying First Residential Property Buying Second Property Buying Third Property
Singapore Citizen


N/A 12% 15%
Permanent Resident


5% 15% 15%


20% 20% 20%


The legal and regulatory implications of owning rental properties are important, too. If you intend to rent out an HDB flat or public housing, you must be a Singapore citizen and fulfill a Minimum Occupation Period (MOP) of five years – i.e. you must live in the property yourself for this long before you can rent it out. You’ll also need to seek HDB’s approval to let out the entire flat itself, as opposed to just one room.

Renting out private properties is a little more straightforward, with no approval needed. However, each occupant must have at least 10 square meters of space, individual partitioning to create more rooms is not allowed, and short-term rental agreements must always exceed six months.

Whether renting out properties is right for you will depend on your ability to find a specific property that’s a good fit for this purpose at the right price, maintain a lucrative gross rental yield, cover your mortgage and other costs, and stay in line with the law.

How to Get Started with Renting Out Property Investment in Singapore

Renting out residential property is a great way to enjoy a boost to your monthly income in the form of a regular gross rental yield. If you think you’ve got what it takes to create and maintain a steady rental income, here’s how you can get started as a future Singapore landlord:

  • Use PropertyGuru to find desirable private properties, or HDB to find an appropriate HDB Flat during planned sales launches.
  • Calculate your potential gross rental yield by adding up your expected rental income and converting it into a percentage of your property value.
  • Appoint a lettings agent to advertise your property for rent and help you find a quality tenant.
  • Set some extra money aside for potential repairs, refurbishments, and maintenance costs.

business man create design modern building and real estate for investment

Strategy 3: Investing in REITs

Perhaps one of the biggest drawbacks of flipping properties or purchasing a rental property is the sheer amount of capital Singaporeans will need to raise to get started. Often, investors will require a lengthy mortgage and a hefty upfront deposit before they can get their hands on the keys – which is where Real Estate Investment Trusts (REITs) come in as a viable investment alternative.

Simply put, investing in REITs is just like buying stocks and shares – the key difference being that REITs use the funds they accumulate to buy and manage properties, instead of to run regular businesses. All these properties earn their rental income, and you’ll receive a portion of it in the form of dividends in line with market performance.

In most cases, REIT investors can expect a rental yield of between 5 and 8% per annum. The reason these percentages are so high comes down to Government cooling measures – REITs are legally required to redistribute 90% of their taxable income every single year. Just like the other investment options in this article, however, REITS have their upsides and downsides.

Pros and Cons – From Tax Implications to Investment Risk Levels


  • REITs are buy-and-hold investments that can deliver regular rental yields for investors over a sustained period.
  • Investors are effectively enjoying passive returns, as no hands-on work is required to make money with REITs.
  • Just like stocks and shares, you can buy or sell a REIT at any time.
  • REIT dividends aren’t usually deemed taxable income in Singapore.


  • Investors have no control over returns or performance.
  • You’ll need to pay a fee if you wish for your REIT investment to be managed professionally.
  • REIT share prices can be volatile and may be adversely affected by major events (such as the COVID-19 pandemic, for example).
  • You may wish to sell your shares quickly if the market takes a downward turn – but it could be difficult to pique interest or demand.

Is Investing in REITs Right for Me?

Just like the other two property investment strategies we’ve explored in this article, REITs won’t be for everyone. REIT investment is a great option for lower-income Singaporeans who want to invest in property without having to fork out a large deposit or take on a high loan to value ratio mortgage. Likewise, REITs are great for anyone who wants to accumulate passive returns – but it’s important to tread carefully.

While you won’t need a particularly high budget to get yourself started and won’t have to worry about your dividends being taxed, REITs prevent you from being able to reinvest your money and can therefore hold your funds saturated for several years.

What’s more, fluctuation in the real estate market can prove problematic, and may at times make it difficult to offload your investments elsewhere – as demand for poorly-performing shares is likely to be limited.

There are currently more than 40 different REITs listed on the Singapore stock exchange, which might make choosing the right investment a challenge, too. We’d recommend sticking to the most popular REIT options, or appointing a financial advisor if this makes you feel more comfortable – though this can prove costly.

Generally, you’ll want to have a good understanding of:

  • Property yield. How much property investors can expect to make in REITs in terms of rental yield monthly?
  • Industry. Which REIT products will be most adaptable to market fluctuations?
  • Price-to-book ratio. Lower ratios offer more growth potential, but higher ones will be worth more.
  • Debt-to-equity ratio. Ideally, property investors should look for a ratio before 60%.

How to Get Started with REITs Property Investment in Singapore

If REITs sound like a sensible investment for someone in your unique financial position, you will need to start by identifying which REIT investments are a good fit for your circumstances.

Here are some of the most popular REITs in Singapore right now:

REIT Name Industry / Sector Market Cap / How Much Others Have Invested
CapitaLand Integrated Commercial Trust


Commercial, Retail S$14,753m
Ascendas REIT


Industrial $12,223m
Mapletree Logistics Trust


Industrial, Logistics $8,306m
Mapletree Commercial Trust


Industrial $6,793m
Keppel DC Reit


Data, Technology $4,654m


When selecting your REIT investment, all property investors should aim to:

  • Find a REIT that is well-managed and offers a consistent income stream.
  • Look for the largest market caps, which tell you how much other people have invested and indicate popularity.
  • Examine your preferred REIT’s historic performance and stability.
  • Don’t jump for the first REIT that has the highest rental yield – stability, share price, and debt-to-equity ratio are equally important.
  • Speak to a financial advisor to ensure you fully understand your investment in Singapore in terms of both rental yield and the potential risks involved.


Conclusion – Which Property Investing Strategy is Best for Me?

Property investment in Singapore can take many forms, and all the investment strategies discussed in this article have their positives and negatives.

Before you jump in and purchase a property to turn into a quick sale, rental home, or REIT investment, would-be property investors like you should think carefully about which option is most appropriate for someone with your circumstances.

Key Takeaways

  • Buying an investment property of any kind will require an upfront deposit, and possibly a mortgage loan and ABSD payments, depending on your current financial and home-owning situation.
  • You’ll need to earn rental income and sustain a strong rental yield that outpaces your mortgage payments and other property-related costs to succeed with a buy-to-let investment in Singapore. This is particularly important if it’s your first property.
  • Property investing in REITS may seem fast, easy, and hassle-free at first glance, but a good understanding of the market is essential and property investors may need to be prepared to sell up in the event of unforeseen market fluctuations.

Here at Instant Loan, we bring our readers exclusive access to all the latest news and information regarding home loans, housing loans, property investments, credit card debt, and financial tips. We also offer a free comparison service that enables property investors to retrieve three housing loan quotes from financial institutions in minutes.


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