re <<Curious what is the going in cap rate or unleveraged return on investment on current price for 650sf flat in HK?>>
... somewhere between absurd to ridiculous.
raw stats here www1.centadata.com
(1) if purchasing second hand in okay neighbourhood, a 676 sft flat www1.centadata.com may run HK$ 13.35M (US$ 1.715M) - yes, the calculation is correct
the closet w/ kitchen and bathroom may rent for HK$ 23,500 per month, or HK$ 282,000 per annum (US$ 36,000). Annual property tax, management fee and insurance should be HK$ 16,000 (US$ 2,000), with gross income at US$ 34,000, taxed at 15%, resulting in net net of US$ 29,000 or net yield of 1.6%.
to buy such a place, the bank requires at least ~70% downpayment and have for decades (banks say 50% but they under-value the property from transaction price), and the lending rate is ~ 2.18% monthly floating (only floating rate loans available in Hong Kong). Monthly payment on 10-year loan (most popular. can go to 15-years but no longer) would be US$ 4,775, and annually at US$ 57,000. Less net, the proud owner needs to subsidise the renter at US$ 28,000 per annum.
The capital gains on eventual sale, if any, would incur no cap-gain tax.
(2) if purchased new construction, would be sillier still.
Above is an indication of what the inflation of the east / deflation of the west / zirp-nirp has done to the middle class everywhere, albeit with different effects.
(3) I had championed and continue to champion the accumulation / holding of Hong Kong industrial real estate / warehouses along the government-planned and privately-funded subway lines per master development plan ever since 2007. the stake has yielded 4% at the get-go and now yielding >10% on cost, as offices and warehouses, awaiting re-zoning / redevelopment, and the capital value has ramped 7.77X without leverage. Figuring there is another double once the neighbourhoods complete redevelopment and matures.
am just playing the game in accordance w/ the rules set down for me by greenspan, bernanke and yellen.
(4) re <<left wing or right wing>> an accountant at 1 year to retirement age, and especially if newly divorced with kids not talking to him, and have a lot of gun toys, and and and earning zero yield, may get peeved and rampage
but if the guy has a decent social security check coming his way on monthly basis and happens to like asian girls, he might find happiness here in thailand, and live like a king
the finicky swiss may have it right, even legally permitting swiss national health insurance to be money-good in thailand. the healthcare here in thailand (bangkok, changmai, koh samui) is super if one can pay very reasonable amounts. |
