Property Rental Income as a Form of Extra or Passive Income

Singaporeans typically have a love affair with property. From the moment they get their first HDB unit, to eventually selling it after the minimum occupation period (MOP), to upgrading to their first condo unit and eventually purchase another condo for investment purposes and for rental income, they typically view property as a stable and long-term investment.

Why do Singaporeans prefer property rental income as a form of extra income? Let’s examine the reasons.

1. Steady and passive income

When you can rent out your investment property, your rental income is considered a stable and passive form of income. This steady stream of cash flow can be particularly attractive for retirees or for those looking looking to supplement their income from their day jobs.

2. High rental demand

Singapore has business-friendly policies to encourage foreign investment. It remains open to the world and continues to attract foreign talent to our shores, especially in fields such as tech, science and finance. The influx of expats will continue to boost demand for rental properties, making rental income a viable option for property investors.

3. Potential for capital appreciation

Being a small country with limited land, property is a scarce resource. Therefore, Singaporeans typically take the view that property prices will appreciate over time … and they historically have. That is why investors don’t mind investing in property. In addition to rental income, there are potential capital gains when they finally sell the property.

4. Diversification of investment portfolio

Besides stocks, bonds or foreign currency, property investment is another asset class which can help diversify an investor’s portfolio. This helps to reduce the risk of exposure to a single asset class.

If you wish to enter the world of property investment, co-living investment is one of the avenues to consider if you don’t want to fork out money for a downpayment for the second property. With co-living, you don’t need to own the property, but you still can receive rental income. Find out how by attending our workshops.