Like Tree9Likes

Is it still a good time to buy a small price property in HK for investment.

Closed Thread
Page 3 of 4 FirstFirst 1 2 3 4 LastLast
  1. #21

    Join Date
    Oct 2010
    Posts
    1,113

    Lol. And the wisest one said because u can get a Mortgage, at less than 2%pa, meaning that you can live in your place, and pay off some principle each month, for the amount you would otherwise be paying in rent!


  2. #22

    Join Date
    Aug 2007
    Posts
    1,192
    Quote Originally Posted by ufo20022008:
    Depends if you are here for the long run. A rental gives you about 2.5-3% p.a. If you are getting a home loan you must tell the bank you are renting it out, if not, they might call loan if they find out. Bear in mind that you need to pay SSD if you are selling the place within 2 years time. So not a good option if you are here for a short time.

    If you have 2-3M HKD to spare (that's what I assume when you say small price property), have you considered putting the money in a RMB deposit? I think the yield is around 2.5 percent p.a., which is not bad in my opinion.
    I would expect an initial rental of over 4%.

  3. #23
    Quote Originally Posted by walkup:
    I would expect an initial rental of over 4%.
    After the management fee, government tax etc have been deducted?
    Also need to factor in renovation costs i.e. getting the property 'rental ready'.
    Last edited by ufo20022008; 03-10-2012 at 12:02 AM.

  4. #24

    Join Date
    Oct 2008
    Location
    Hong Kong
    Posts
    194

    comparing rent to mortgage payment at current levels is like comparing apples to oranges...

    over 70% of my mortage payment goes to principal.

    even if i break even every month on cash flow, capital is flowing in. focusing on that extra cash flow from rental yield is a small insignificant number... so small and insignificant like who cares??? (unless you're completely strapped).

    probably every owner with a rental is aware of this, except you guys.


  5. #25

    Join Date
    Aug 2007
    Posts
    1,192
    Quote Originally Posted by ufo20022008:
    After the management fee, government tax etc have been deducted? Also need to factor in renovation costs i.e. getting the property 'rental ready'.
    Answer: from my 2011 purchase? Yes.
    If I was making a new purchase 2012, would be looking for an initial 4.5%+ gross return.
    Last edited by walkup; 03-10-2012 at 01:26 AM.

  6. #26

    Join Date
    Apr 2011
    Location
    You mean physically, right?
    Posts
    149
    Quote Originally Posted by randy1:
    I agree Penang is a good place to invest.
    Problem with Penang is that foreigners can't buy property there. If I remember correctly you need a local to co own it. Or am I mixing up with Vietnam?

  7. #27

    Join Date
    Jan 2010
    Posts
    272
    Quote Originally Posted by drumbrake:
    I remember a wise old property agent (not one of the young kids in a smart suit) asking me a few years ago - what will you do if there is nobody to rent the property?
    Good point. We could still pay the mortgage though, so while not ideal, not the end of the world.

  8. #28

    Join Date
    Mar 2007
    Location
    Gold Coast Marina
    Posts
    17,934
    Quote Originally Posted by YCC:
    I actually have thought of buying a property in southeast asia like Malaysia; you get better deal for your money but I'm often weary about offshore purchase as a foreigner and the taxing issue.

    I just thought maybe it's better to put money in real estate cause at least you can get rental income, the stock market not doing too good and fluctuate a lot? Also if you buy stocks yourself you need to pay attention to the market all the time. Agree?
    I would not touch "offshore" investing in Malaysia with a bargepole. You'll get ripped off good and proper.

    And no, you do NOT need to watch the markets if you invest in stocks. IN fact that's probably the worst thing to do. Find a balanced portfolio of high quality stocks; invest and leave it or set up a monthly purchase plan. DON'T try to "time" the market and don't rush to sell the minute it turns down for a while.

  9. #29

    Join Date
    Dec 2009
    Location
    Sai Kung / Clearwater Bay
    Posts
    1,529

    I would say the arguement about paying off a mortgage versus rent holds some water. altho it definitely depends when you bought the property? I had to put in about 30 to 40% - but my mortgage repayment is extremely low compared to renting right now. ( I'd say about 1/3 of what people would pay to rent.... )

    I'd be more interested in knowing the best time to sell? but since I dont have a plan to leave just yet I dont think I should do anything?

    I paid about a million and a half, and it seems like the going rate is 2.5 to 3 million now.

    absolutely crazy! we are talking in just 3 or 4 years!

    before I bought I looked at the history of the purchase price of the house.. it's never dropped below 1.25 mil and changed hands for 2.8 at its peak!

    finger's X'd the next big peak co-incides with me moving off and buying a farm somewhere much cheaper!


  10. #30

    Join Date
    Oct 2006
    Posts
    4,905

    It doesn't really make sense to compare what one pays in rent now vs what your mortgage payment are since they were established at different times. It is relevant for you in terms of making a decision to sell or buy but not otherwise. As to the rent vs mortgage, it also depends on what you do with your money.

    If you sold the apartment now and invested the cash(in some countries, you could all out buy a property for half the value of your current flat and directly pocket the rent for example), you could possibly make more than enough to cover your rent and put some in your pocket while diversifying.

    That's the decision I made a few years ago when I sold off my property and it allows me not to have to work anymore. If my assets were all tied up in a property, I would have to hold a steady job.

    However most people prefer to have a fairly passive investment that requires very little maintenance and is pretty well guaranteed to make you money in the long run. That's why buying a property and living in it does make sense for most people. The biggest problem in HK is that for many people, it means having all your eggs in the same basket.