After I sold my 500 sq ft apartment at Mid-Levels (which I used to earn rental income), I had around HK$3.5m to invest. Initially I placed the money on term deposit at the bank but the interest rate was less than 1%. What’s worse is that whenever I go to the bank, bank staff would persuade me to buy financial products that I didn’t understand nor trust (especially after the Lehman mini-bond incident). So I decided to look for another small apartment to buy and then lease it to earn rental income.
With so many properties around, I wasn’t quite sure where to start or how to go about doing it, so I asked around and through referral contacted Colin at Property Buyer’s Agency for advice and assistance. Colin asked about my objectives for and requirements of the ideal property. He then conducted a search and initially recommended a ~500 sq ft apartment (with tenancy agreement earning HK$11,000 per month) at Conduit Road, Mid-Levels West that was selling for HK$3.95m. Colin explained that this property was located at a good address in a prestigious residential area and with capital appreciation potential. However I preferred not to invest more than HK$3.5m so I asked Colin to search for another apartment. (With the benefit of hindsight, Colin’s recommendation was very accurate because after Henderson Land sold the “world record” apartment at 39 Conduit Road, the value of all residential properties on Conduit Road appreciated and the valuation of that apartment rose to HK$5.1m.)
After about a week, Colin recommended and arranged for us to visit a number of residential estate in Causeway Bay. These apartments were also around 500 sq ft, 40+ years old but located in the heart of Causeway Bay being very close to SOGO. Colin explained to us the acquisition and re-development activities that are already going on in the area. We then decided on a particular residential estate and Colin quickly came up with a shortlist of properties available for sale in the building and guided us to carry out pre-purchase due diligence, in particular he carried out a thorough check on the land search and pointed out to us Building Orders on the common area of the building.
We then made an offer to buy an apartment at a high floor zone and Colin negotiated with the landlord on our behalf. However after days of negotiation the landlord refused to lower the asking price so Colin recommended that we try another apartment a few floors below. This time, negotiation went smoothly and within a few hours, a deal was struck! What’s more is that we managed to buy this apartment at HK$100,000 less than our original budget and that this apartment was newly renovated as well!
Colin followed through on the transaction diligently until completion. Several times prior to completion, the vendor hinted that he wished to cancel the transaction because the apartment had quickly appreciated in value. By the time of completion (2 months after the signing of the Preliminary Sales & Purchase Agreement), the value of the apartment had already gone up by 10% and Selling Agents were already calling me asking if I wish to sell. However as I planned to use this apartment to generate rental income to fund my retirement, I declined to sell.
As I joined the company's “Care Free Rental Income Program” (before I bought the apartment), Property Buyer's Agency arranged for my property to be leased (through Selling Agents) and then they handle the associated administration. Within 3 weeks, the property was leased to an Australian expatriate and this generated rental yield of 5%, much more than the 0.01% for bank deposit! For a small fee, Property Buyer's Agency handles all the administration related to the leasing of the apartment and this frees up my time to be a care free landlord!
Thank you Property Buyer’s Agency and Colin for your great help in my search, purchase and of my investment property. I would recommend to anyone who wish to buy a property to earn rental income to contact the professionals at Property Buyer’s Agency.
Helen, Retiree
June 2010 |
