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Are people really losing money on their properties?

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  1. #21

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    why is festival city selling like water at 9M plus but they cant rent the units and rental prices are dropping to 14k for 1000 sq ft.

    i dont care about festival city personally, just using it as an example.


  2. #22

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    Quote Originally Posted by booth:
    why is festival city selling like water at 9M plus but they cant rent the units and rental prices are dropping to 14k for 1000 sq ft.

    i dont care about festival city personally, just using it as an example.
    I wondered that myself. I considered moving there but the rental price makes no sense and the last thing I would want to be hit with a 50%+ price hike in 12 months time (considering a large part of the reason I would move there is price).

    I have, though, seen a lot of griping online about that property. another reason I chose to stay put where I am....

  3. #23

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    Quote Originally Posted by booth:
    good points, so what are your estimates on whether the property will go up or come down?

    some estates i dont understand the rentals, sale prices, etc.
    IF only anyone new. I have no idea on the global scale.

    I have only got 2 flats in HK.
    One worked very well as an investement and was sold a while back.
    The other one, I live in it and bought it with the prospect of staying for about 4/5 years and then see how things are. I have no issue keeping it and renting it out while moving out of HK or buying another place, and I have no issue with selling it if the price is "right".

    But before buying I spent months visiting flats in that area (and a few others) and looking at what was the potential of specific properties in that area as well as elaborating worst case scenario (ie drop of 70%, interests giong up big time...). After months of considerations I made what I considered at the time an offer within my range and after a few hours of negotiation the seller went down to the price I wanted.

    While the purchase itself took only a few hours, the research took months. If you are not prepared to do this, then forget about it. (unless you are filthy rich and do not care).

  4. #24

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    Regards to Tai Wai Festival City, there are 2 government schools on the podium, so that cant be a good sign. Many people say its loud. I dont really want to consider it either. You can try to sign a 2 yr where only the tenant can break the lease, but considering landlords are taking 6 month leases, maybe they predict the prices to go up after the supply tames down.

    Some units had a sewer odor and I was like wtf. They are brand new.


  5. #25

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    About the research and price. I dont think I could get a seller to budge as much as I would like, so I remain on the sidelines. I do like particular buildings too.


  6. #26

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    What is your budget booth?


  7. #27

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    I can find places in my budget, but I just feel like its too much risk. I dont see the value in the flat itself to justify the purchase.


  8. #28

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    Risk assertion is the first thing you should be doing for any type of investment...


  9. #29

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    I noticed sewer odor a lot of times in SZ properties, even brand new ones (to be fair, only in the toilet though).


  10. #30

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    Quote Originally Posted by dipper:
    Yes but you're presumably not leaving it empty for 25 years. So on top of any value increase you're presumably also getting a rental yield of say, 4%.
    Yes, I was assuming self use, but the model can be used for investment rental also. To do this I benchmark the property against a safe corporate bond, usually giving between 3-5%.

    The rental yield figure is misleading, a 4% figure does not mean a 4% return. After factoring vacancy, routine repairs, and rental income taxes, the return is more like 2-2.5%.

    In reality, the rental income is important from a cash flow perspective, but does not make or break the investment. In hong kong property, the big swings in wealth are determined by appreciation/depreciation.

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