I wonder why you are not discussing REITs. I think they are better than directly owning investment properties. If you look at Link Reit or Sunlight (0435) or Fortune (0778), they have gone up as much as properties, while giving a higher yield and you don't need to worry about a tenant, renovations, etc. (and no agent to pay).
Link is a bit of an unusual case because they got a lot of undervalued properties, renovated them and spiked rents to impossible levels. Sunlight might be more representative of the potential of reits.
Over the last 10 years::
Centacity index up 200%
Fortune up 236%
Sunlight up 275%
Link Reit up 630%
Another advantage is that it's more responsive to price swings, so you can buy some if the price drops (momentarily). I read that June was the top price for properties, but the Centacity index has hardly moved, while Sunlight has gone down by 15% since 15 July, Fortune by 14%, and Link by 5%.
Of course if you buy a house you can easily leverage, but with a revenue of 2.5% and a mortgage interest rate of 2.3% it doesn't make much sense. And the yield of these reits is much higher than that of properties: That of Link isn't very high (2.92%), but Sunlight is 4.94% and Fortune is 5.47%. Good luck finding that with a property in HK. Also, you don't need to pay taxes on the dividend, but you need to pay taxes on the rent of investment properties, right?
I have recently found what seems to be a good REIT ETF in USA: RQI, although perhaps a bit pricey right now? It's up 180% since 2009, and it has a dividend of 4.5% (after taxes), with monthly distribution. Tell me what you think !
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