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Guide To Property Investment In Singapore: 7 Ways to Make Money

property investment singapore
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You may have heard of people earning considerable profits from real estate. Is it really true?

Property investment in Singapore is profitable. In fact, before the global economic crisis, Singapore’s residential property price surged to 38.2% in a space of one year in Q2 2010. As such, the government stepped in and took measures to ensure that properties remain affordable for citizens.

But with the implementation of such cooling measures, it may seem like property investing is a bad idea. Thankfully, there are other ways to earn money from real estate other than buying and selling. In fact, it can generate money regularly and can be a good long-term investment. It is a good strategy to start building your wealth.

How Can I Make Money From Real Estate Investments in Singapore?

1. Rental Properties

Renting your property or a part of it can help you generate rental income which could help you do the repayment of a property loan or any other investment that you have made towards the property. Once your mortgages are over, you can start earning from them too.

Pros Cons
Content Can be difficult to manage the tenants
Maximizes the capital gain from the property. In some cases, the tenants can also cause property damage.
Many expenses are tax-deductible.

The amount you can obtain from collecting rental income is also known as rental yield. For instance, if you’re renting out a residential property you purchased for S$1,000,000 at S$8,000 a month, you would earn S$96,000 a year. The gross rental yield would be 9.6% [(S$96,000/1,000,000) x 100%].

Investing in rental property comes up with certain fees in Singapore that you will have to bear. You will have to pay an agent to source your tenants.

The fees of the agent may depend on the size of the property, its price, and length of tenancy too. For example, if a tenant agrees to live in the property for a long term then the tenant would incur heavy fees, while if he rents for a short duration then the fees will not be that high. Normally, the fees or the amount of commission is 15 days to 2 months of rent.

Businessman show 3d real estate building for investment on tablet screen.

2. Real Estate Investment Trusts (REITs)

Investors are drawn toward REIGs because of the passive income that they offer. A person can fetch a decent yield of 5-8% per annum with Singapore’s REIG. It is so popular that it is considered the largest REIG market in Asia outside of Japan.

These real estate investment trusts allow you to get large properties with small investments and provide professional property management services to manage your property, enhancing your portfolio and maximizing the rent.

The investment process in REITs is the same as investing in the stocks and other securities listed on SGX. If you already invest in stocks, you can buy and sell REITs in the same way.

Pros and Cons of owning Property vs REIT

REIT Physical property
The initial investment can be as low as a hundred dollars. Minimum of 20% of the property price should be initially invested.
The interest rate can range between 2.9% to 6.0%. Interest rate is normally close to 1.7%.
Purchases can be completed via SGX in a few simple clicks. Involves various steps like working with an agent, viewing property multiple times, negotiating, applying for a loan, and so on.
Multiple properties can be easily owned. Owning only a handful of property is feasible
Dividends received are not taxable. Tax received is taxable.
Less control over assets. Full control over assets.

 3. House Flipping

House flipping means that someone buys a house and then tries to quickly re-sell to gain profits. Though this method is often called the most frustrating investment, it is also one of the most rewarding property investments.

Generally, house flipping requires experience and it is advised to research well before making an offer for a house. It will help you save a lot of time, frustration, and money.

Pros Cons
High profits; generally within 6 months of investment. High risks of investment
Potentially safer investment. Rapid changes in the market can affect your investments.
Helps in building a network that might help in other deals. Unanticipated costs can occur, reducing your profit.

4. Online Real Estate Platforms

This is the latest way to invest in commercial real estate. Crowdsourcing platforms or real estate investment platforms pair developers and other professionals with individual property investors who are looking forward to exposing the real estate. This process makes owning, financing, and managing the property hassle-free.

This too comes up with a fee or commission involved when a property is finalized. The fees depend on the size of the property, year of construction, locality, etc. It is generally a fixed percentage of the total amount of the property’s prize.

5. Build a new home on spec

Spec home is a smart way to invest in real estate, especially when the general market is doing well and the supply of the new house is low. While you will have to make further investments to do this, it may not be a great investment for everyone. It is also time-consuming.

It generally involves a couple of months to fix the house. Make sure you consider the increased time and complete several fixes and flip works. A longer timeframe means an additional risk factor of fluctuations in the market. The market may be at its peak right now but things may change unpredictably in time.

6. Capital Appreciation

You can also build wealth from real estate through capital appreciation. This occurs when the property value increases above its purchase price over time.

For instance, you bought a property for S$1,000,000. Then let’s say this property becomes in demand and rises in value to S$1,500,000. The Capital Appreciation of the property is S$500,000. 

7. Home Ownership

This is considered the most peaceful financial investment. While you keep paying insurance and taxes, you will not have to worry about losing the house. The ups and downs of the market do not affect your peace a lot and it also frees up money to start saving and investing them in other types of markets.

Homeownership is one of the best long-term investments and does not increase our cash flow. It will give a huge boost to your net worth as you become the owner of a valuable asset.

If you are not willing to take a lot of property and do not want to get involved in things much after the deal is done then this is the best way to invest. Once the investment is done, you can live peacefully without any stress, while your property appreciates in the market.

Make money with property and real estate investment, 3d rendering

How Do I Find a Good Investment Property in Singapore?

1. Be on the lookout for a good entry price

Make sure that the property is selling at a price lower than its current value. For example, if the property’s average cost is S$1,500 per square foot and it is selling for S$900 psf, then it is a good entry price.

2. Beware of rising vacancy rates

Use the vacancy rate to determine the potential demand for a rental property in a certain area. That said, a low vacancy rate means there is high rental demand.

3. Look for a property with good long-term values

A cheap property doesn’t always equate to high long-term value. The value of the property can be influenced by various factors, such as convenient transportation, nearby amenities, and the development of business hubs.

4. Look for nearby amenities

When investing in a property, make sure that it is near schools, sports facilities, MRT and other forms of transport, and more.

5. Are there planned major developments in the area?

Areas, where there is a planned development of business hubs, shopping malls, or new MRT stations, can drive prices up.

6. Visit property auctions

You may find a valuable property at an irresistible price at property auctions. Some of these properties are distressed properties that liquidators would like to sell quickly.

Note that property investing in Singapore comes with fees. Additionally, you must familiarize yourself with these important abbreviations:

  • Seller’s Stamp Duty (SSD)

This is a tax payable if you sell a residential property within 3 years of buying it.

  • Additional Buyer’s Stamp Duty (ABSD)

This is a tax payable if you’re buying another residential property when you already own one in Singapore.

Tips When You’re Already Investing

1. Ensure that you are financially ready

Investing in real estate is a major commitment, so you must be prepared for a huge expenditure. You can acquire a property using a mix of your available cash, CPF savings, and a home loan.

For instance, you can take out a housing loan in Singapore with an average interest rate between 0.80% and 2.50%. Most Singapore banks charge below 2% p.a.

2. Be prepared to face challenges

Real estate in areas with planned major developments may face disadvantages at the present. However, it may pay off once future developments start happening. That said, consider whether putting up with the inconveniences for a few years is worth it.

3. Take note of additional expenses

For instance, you may be tempted to add landscaping to attract tenants, but tenants might not be too concerned. These expenses will add up to huge losses that could eat into your profits. Some of these expenses may take the form of maintenance fees or materials and labor costs.

4. Have an exit strategy

Set a timeline of when your real estate investment should sell. For instance, you may want to sell it when the property value starts appreciating or when it has reached its growth potential and its property market value is plateauing.

5. Make sure you have enough savings

It is good practice to always have savings set aside in case you lose your job and be unable to repay your loan. Or you may need funds to tide you over until you find your next tenant. The most abundant and affordable option for home ownership in Singapore is HDB flats. You can also read our article on the cost of buying a property in Singapore.

Factors That Affect Property Prices

1. Location and Amenities

Properties near the MRT, or close to business hubs and schools tend to have higher property values. In fact, you will find higher concentrations of residential housing around the city centre. This is because people want to be close to their work, or school, or be in an area where they can easily have access to shopping malls.

2. Home Improvements

Prices of old properties tend to be lower because they typically require renovations. That said, when it comes to property investment, consider whether the property is a fixer-upper. Note that although you’ll be getting the real estate at a cheaper price, you may need to spend on home renovations.

On the other hand, properties that have undergone renovations and upgrades may have higher asking prices.

3. Interest Rates

Interest rates affect the affordability of buying a house. As a rule of thumb, low-interest rates lead to low mortgage rates. This effectively makes the monthly mortgage repayments more affordable. On the other hand, higher interest rates make property investment less attractive.

Note that most homeowners in Singapore have variable mortgages. So even a small change in interest rates can have a huge impact on housing prices.

4. State of the Economy

The economy influences the real estate market by influencing homebuyers’ and investors’ ability to afford a house. 

For instance, amidst the COVID-19 pandemic in 2021, there was a 10.6% increase in private home prices. Additionally, residential property prices are expected to rise between 1% and 4%.

This is possible due to several factors, including low interest rates, limited supply, and strong demands.

5. Prices of Similar Properties Within the Area

The properties sold in the same area may influence other property prices. A surveyor or valuer may look at recent sales of properties with similar features within the same area as a gauge in determining your property’s potential worth.

Using the same logic, foreclosures and short sales may reduce the area’s average real estate prices.

6. Lease

Most residential properties in Singapore are leasehold. So the property price will depend on the duration of the lease. For example, properties that are approaching the end of the lease may have lower prices.

A freehold property, on the other hand, typically maintains its value better over time. However, they are usually much more expensive.

Challenges of Being a Landlord

Property investment in the form of rental properties is a good opportunity to earn extra income and build wealth. But renting out a property isn’t a get-rich-quick-scheme. Just like other types of property investments, it comes with a few challenges. You may have to deal with the following:

1. Property Maintenance Costs

As a landlord, be prepared to pay additional costs, such as property tax and maintenance fees. For instance, private condos may charge monthly management maintenance fees for cleaning the pool or repainting the building.

2. Property Tax

Property tax is progressive. It is usually based on the Annual Value (AV) of your home. AV is the estimated gross rental income of your property per year and it is determined by a valuation from Inland Revenue Authority Service (IRAS).

Annual Value ($) Effective 1 Jan 2015 Property Tax Payable
First 30,000

Next $15,000





First $45,000

Next $15,000




First $60,000

Next $15,000




First $75,000

Next $15,000




First $90,000

Above $90,000



(Table from IRAS)

3. Problematic Tenants

Unfortunately, you can’t always guarantee that your tenants will be able to keep up with monthly payments. Even financially responsible individuals can face unexpected financial challenges and have trouble paying their bills.

Aside from tenants who fail to pay rent, landlords may also have to deal with tenants who break their lease contracts early. That said, you need to protect yourself. Here are a few tips:

  • Carefully screen your tenants. Do they have a history of missing rental payments?
  • Include a clause in your lease agreement. If they fail to pay rent, they will incur late fees.
  • If the tenant decides to leave early, place a clause in the agreement that states they will pay additional fees. This is because you’ll be suffering financial losses if they leave early.

4. Renovation

As a homeowner and landlord, your rental property will need constant upkeep. For instance, pipes and taps may start leaking, furniture will start to wear and tear, equipment breaks down, and so on.

That said, you need to set aside funds and downtime for proper maintenance and upkeep. Do not take this for granted. If a tenant suffers loss or injury while staying on your property, you may be liable for damages.

5. Hiring Realtors

Unless you’re familiar with the property market, you’ll probably need a real estate agent. These professionals can help you find tenants and properly screen them.

But how much should you pay your realtor? As a rule of thumb, you’ll need to pay one-month worth of rent if the tenant signs a two-year lease. If the tenant stays for a year, you’ll need to pay half of one month’s rent.

Where To Find Properties for Sale

1. Online property portals

This is the fastest and most convenient way of finding a property. Note that these property listings are typically marked up so you have room to negotiate. A few sites you may look into include, PropertyGuru, STProperty,, and

2. Real estate agents

Another way is to employ the service of a licensed property agent. These professionals are trained to look for properties that will meet your requirements. You may need to pay a commission of around 1%.

3. Property auctions

This is a good place to find good property deals. This is where banks, developers, or private sellers sell off property. So how does it work?

Several properties will be put up for bidding. A reserve price will be determined for each real estate. Note that the reserve price doesn’t always have to be cheaper than other sources, like online property portals.

4. Property launches

If you’re looking for a brand-new property, you can check out sale launches by various developers. Note that property transactions of an uncompleted property will take longer than a completed one. So this may not be a good property investment option if you want to start earning as soon as possible.


Is real estate good property investment in Singapore? There is no direct answer to this. Ideally, property investment is as simple as buying a property, renting it out for a side income, or selling it at a profit. You can also buy REITs, but that requires a lot of research and tactical market analysis.

Key takeaways

  • Investing in property and then renting them out is an attractive option to build wealth.
  • The property value can be influenced by various factors, such as convenient transportation, nearby amenities, and the development of business hubs.
  • You can acquire a property using a mix of your available cash, CPF savings, and a home loan.
  • The average housing loan interest rate in Singapore is between 0.80% and 2.50%. Most Singapore banks charge below 2% p.a.

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