PROPERTY investors love new launches - they can get their hands on a unit fresh off the plans and hope for huge overnight gains.

But long-term investors would do well to also check out completed properties that can generate an immediate rental income.

'Too many people are overweight in their investment portfolio in terms of new launches,' says Savills Singapore director for marketing and business development, Mr Ku Swee Yong. 'To lower one's risks, part of the portfolio should be income-producing.'

INCLUDING READY PROPERTIES such as Cuscaden Residences (above) and Chelsea Lodge (main head [picture) in one's portfolio can help to lower one's investment risks because in a short-term market dip, investors can still enjoy a certain amount of income from rentals. Source (include table): Savills Singapore

That will give investors a certain amount of income from property even during a short-term market dip, he says.

Although Singapore's market is currently buoyant, it has its ups and downs as any homebuyer over the past 10 years knows only too well.

For those buying on a progressive payment scheme, the instant income from a completed property could help cover mortgage payments.

This option has become more attractive with the recent axing of the deferred payment scheme, which puts buying a completed property on a level playing field with buying an uncompleted one.

Buyers will have to take out a loan sooner since they can no longer defer the bulk of the payment for an uncompleted property until completion.

When it comes to getting a mortgage, it may not necessarily be easier to get a loan for a completed property compared with an uncompleted one.

OCBC Bank says it does not differentiate between completed and uncompleted property.

Still, in line with the pickup in home prices, the rental market has shot up across the board, making the purchase of a completed property for rental gains more worthwhile.

Official data showed that rents of private homes rose by 11.4 per cent in the third quarter, making a 32.2 per cent rise between January and September.

Completed properties are generally more 'reasonably priced' compared with new launches, says one investor.

A recent Jones Lang LaSalle study found that the gap between new sale prices and resale prices is at a record high.

But this is likely to narrow as buyers find it less attractive to buy new developments when habitable resale homes at more affordable prices are readily available, it said.

A tip from a seasoned investor: Consider projects that will get their temporary occupation permit within the next three to six months.

'These projects would have been launched about three years ago when prices were low,' he says, so their sub-sale prices will usually be lower than those of new launches.

'Another advantage is that you will be the first landlord and have the privilege of charging rental based on the current market rate,' he adds.

'There's no point taking over a lease that has two years to go and that was based on old, lower rental rates.'

As a guide, properties offering a rental yield of at least 3 per cent are a safe bet, says Mr Ku. These can be found in completed properties in city fringes such as Siglap and Balestier.

Bargains are tougher to find in hot areas like Amber and Meyer roads where asking prices have risen so much that yields have fallen below 2.5 per cent, he says.

Some older properties may offer fairly high yields but investors must factor in maintenance costs, consultants say.

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