Real Estate Investment: Interview with Marc S., Senior Realty Adviser

When you reach a certain financial milestone in your life, the next step tends to be learning how to grow that wealth. That’s where investments come swiftly into the picture.

However, it’s understandable that first time investors may feel a little jittery about doling out a big sum for any form of investment. Well, we’re here to put you at ease, and show you why investing in real estate can prove to be a good decision – with the help of Marc S., of course.

Drawn to the dynamic and fast-paced nature of the industry, Marc, Senior Realty Adviser at Knight Frank Singapore, went into real estate in 2011. During his time in the commercial real estate industry, Marc has not only confidently advised clients on their real estate acquisitions but ensured that they got the best out of their investment.

So to learn more about his experience and work, we sat down with Marc for a quick chat on how relatively easy it can be to invest in real estate, as well as what advice he has for first time investors and entrepreneurs.

Marie France Asia: Have you ever invested in real estate?

Marc S.: I have, and I will continue to do so. In fact, my first investment was a commercial property in the CBD area, and when I was only 24. I had to borrow the funds from my parents and sold it a year and a half later, making almost 30% in profits. It was a bold move on my end, and it required some convincing, considering I was still relatively young. Nonetheless, I knew what I was doing, and it turned out to be a very good decision.

MFA: What should first time investors look out for?

M.S.: A lot of those who have never invested in real estate before either don’t realise their capability to do so, or have a fear of stepping outside their comfort zone and taking a risk.

Firstly, for those who think they do not have the financial capability but are keen on making their first real estate investment, I would suggest getting qualified by a banker, who will then help you determine your budget. This will also prevent one from over leveraging and over committing. Getting a loan of up to 80% is possible, and that would reduce your downpayment to a mere 20%.

Secondly, do your research on the area and type of property you’re keen on investing in. Check for future developments around the area, as these can add value to your real estate, and will make your property more rentable.

Thirdly, work closely with a trustworthy and experienced agent, one whom you have a good rapport and chemistry with.

Lastly, note that there is a way to claim back your GST on the property purchased, which can be a significant amount. Unfortunately, a lot of inexperienced investors are not aware of this. Heed the advice from the relevant professionals in the industry to ensure you avoid the pitfalls.

MFA: What are some of the mistakes to avoid when investing in real estate?

M.S.: Never make investment decisions based on sentiments. I have personally seen investors who have an emotional connection with certain properties, and they allowed it to cloud their judgment. Do not make impulsive decisions. It is always wise to do research and speak to professionals.

MFA: At the moment, which commercial real estate property would be ideal for first time investors?

M.S.: I don’t normally recommend any one property in particular, as there are many factors behind why it would make a good investment choice. However, I believe the recently launched project, City Gate, has great promise and is the one I’ve been highly recommending to all my clients. It’s strategically located on the city fringe (along Beach Road), and with major developments around the area, the project’s potential becomes very exciting.

MFA: I understand that you’ve also had your own startup, what would be your advice for other entrepreneurs?

M.S.: Generally the key things to look out for include location, human traffic, size of unit and layout. For instance if you have a warehouse and it’s located too far away, you could inadvertently be adding on to your logistics cost. Or if you have a retail space with little human traffic, you’re not going to be able to sell your product well, despite your marketing efforts.

I understand that one of the important things for start-ups is to reduce overheads. Hence, I take it upon myself to ensure entrepreneurs and business owners do get the best value, and advise them accordingly so that they do not pay unreasonable rent.

I enjoy working with entrepreneurs and helping them get a space for their start-ups or businesses. It is refreshing to see their passion and drive, in wanting to execute their ideas – especially from the younger ones who are venturing with their first idea. As it is, I’m currently involved in helping a business expand their F&B franchise here.

MFA: How has the commercial real estate scene changed in recent times?

M.S.: A common misconception now is that the real estate market is doing poorly, and one should stay away from investing in it. That is true, but only for the residential sector, which has been affected by the government’s cooling measures. Unless you’re purchasing a home to reside in, I would recommend steering away from residential properties solely for investment.

Commercial real estate, despite being affected by the slow-down to a certain extent, is becoming a firmly established component of the investment portfolios of discerning and astute investors.

MFA: Would real estate be considered a less risky investment?

M.S.: Singapore is one of the few developed cities with no capital gains tax. It is relatively easy for investors, both local and foreign, to get loans and purchase real estate here. Based on the 2016 Wealth Report by Knight Frank, Singapore has risen to the 3^rd place, as the city that matters most to the world’s most wealthy. This shows that Singapore has great growth potential and is highly valued by high net-worth individuals.

Investors have made sizable profits over the years, and will continue to do so. Real estate here will continue to appreciate in value, also because Singapore is land-scarce. Unlike other investment options, commercial real estate will give investors capital gains, a monthly yield, and will act as a hedge against inflation. That’s the beauty of a tangible investment.

Acquiring commercial real estate has become an alternative way to grow one’s portfolio. The interest in commercial real estate is also due to tax exemptions, making it an attractive investment.

I am confident the commercial real estate market is going to grow significantly from next year, after a lull period the last few years. This leaves 2016 as the year to acquire commercial properties as an investment.

For more information on real estate advice or if you’re looking for a commercial space, contact Marc S. at [email protected]