My friend, Mary purchased a flat in January 2004 in HK, cost HKD 1.45 million. In March 2009, she sold it for HKD 1.4 million. Someone had advised her that in about 6 months, there would be mass transit railway connected to the area near her flat in HK. But she would not listen to the advice. There is a saying says, “wise people listens to advice.”) That flat was new and according to my other friend’s information (research had been done), property price rise is higher for property within ten years old. She later bought a flat, roof floor near where she lives. That flat was quite old and there was water leakage. So she moved out. The only angle of thinking for her was convenience. In 2013, her previous flat costs over HKD 3 million, double her purchased price. I tried to do research on her decision making. I asked her many questions. She admitted that she lacks of stamina to wait. She also lack of multitudes of advisor. She did not seek advice from many of her friends. Multi-angle analysis is necessary in her case or in many other cases. I asked if she had thought of long term investment such that in twenty years, she could sell that flat and will have a handsome sum of money for retirement if she needs that. When she bought the flat, she had income proof for mortgage. She had enough down payment. Now, her income drops. The flat she lives with her son belongs to his brother, who once wanted to sell the flat. In fact her brother asked them to move out in 2017. The property in 2017 cost around HK$4.5 million (450,000 pounds). They are paying quite high rent now. And the rent will continue to rise. But I am concerned of her retirement fund. Looking back, it would be better for her to keep that flat in the New Territories, continue to rent it out. Let others to pay the rent to cover most if not all of the mortgage is the best decision. As rental increases, she would have money in pocket besides paying for the mortgage. She was bothered to take care of minor trouble of renting the flat out. She should have overcome that and persevere to continually rent the flat out. The mortgage will have completed after 20 years. By then, all rent will be in pocket or if necessary, she can sell it to maintain her living during her retirement. When she sold the flat in 2009, she was 47 years old, a single mother, 13 years towards 60.
In fact there are 370,000 persons who sold their properties and cannot buy property again in 2017. So paying 30 or 40 years rental is a very huge sum of money.
In fact there are 370,000 persons who sold their properties and cannot buy property again in 2017. So paying 30 or 40 years rental is a very huge sum of money.