Head V Heart - property

So we bought a property when everyone said wait (in Hong Kong) went through the pain of renovating it and it appears to have been bought at the bottom of last year’s slump and increased in value by about 50%.

Do we sell it for a quick profit (sizeable profit) or stay put because we built it as a home and a stable base for the next few years?

Those that know me realise that as a single guy this would be a no brainer but now I’m married with a kid I need to think about the rest of the family.

We know that by the time our little one is 4 or 5 we will have to look for something with more space, and realistically the profit might allow us to buy something for cash further out of the city.

Interested in everyone’s view. This only cam up yesterday so I do not have any firm opinions.

How come everyone except me seems to have got lucky on property??

[quote=“Edgar Allen”]So we bought a property when everyone said wait (in Hong Kong) went through the pain of renovating it and it appears to have been bought at the bottom of last year’s slump and increased in value by about 50%.

Do we sell it for a quick profit (sizeable profit) or stay put because we built it as a home and a stable base for the next few years?

Those that know me realise that as a single guy this would be a no brainer but now I’m married with a kid I need to think about the rest of the family.

We know that by the time our little one is 4 or 5 we will have to look for something with more space, and realistically the profit might allow us to buy something for cash further out of the city.

Interested in everyone’s view. This only cam up yesterday so I do not have any firm opinions.[/quote]

Definitely use your head, not your heart - family or not. They’ll be grateful, whether they realise now or not. Just make sure that selling it now WILL actually help you in your quest to upgrade.

EA -
I might suggest you use both head & heart.

Does the house now meet you needs for a home?
Do you enjoy living there?
After your improvements, is it a good place for your child to live and grow in?

Since you think you might need a larger space in 5 yrs or so, how about just living there, continuing to make any desired improvements, and reap any benefits to be had when the time comes?

Personally, and this is merely my own opinion, I think its good for a family starting out to have a stable comfortable place to grow in. Good for the youngun to see the same stable environment for those first impressionable years.

As you live there and increase the value of the place through more minor, maybe some major, renovations, both your investment value and your living experience should improve.

Just my… :2cents: …(US$ of course)

What’s the rental market like? How long can you sit on the proceeds before you get hit with capital gains (if there are any - I remember vaguely that HKG has no capital gains tax)?

Sell at the peak, you buy at the peak; potentially setting yourself up for some risk unless you rent.

What does your wife want, do that. You have to live and sleep with her; we don’t.

[quote=“Elegua”]What’s the rental market like? How long can you sit on the proceeds before you get hit with capital gains (if there are any - I remember vaguely that HKG has no capital gains tax)?

Sell at the peak, you buy at the peak; potentially setting yourself up for some risk unless you rent.[/quote]
I went yesterday to take down our for rent sign. Yay! Hopefully that’s a sign that things are getting better.

Are you living there? If not, do you think the economy’s going to continue to improve?
If the answer to both is ‘no’, sell.

OK some good stuff here I’ll try to fill in the gaps.

Llary you bought property to live in not to invest right? Give it 20 years and you might get “lucky”

Iris - might not look to “upgrade” just to end up without a mortgage. The place we have now was outrageously expensive, I can’t see myself ever spending more - but then who knows

TC - HK market is very volatile and the current upswing is through hot Chinese money. I suspect it is a bubble and hence 5 years from now I may get a lot less than I would now.

The place is gorgeous, we spent a fortune renovating it to the way we wanted it, and its plenty big enough for the next 3-5 years.

Elegua - yes I have thought about renting after wards - although of course it begs the question what would we do with the proceeds - no bank interest now. There are no capital gains in HK - you are correct.

Okami very wise, I suspect after the initial conversation that she is as torn as I. She is Taiwanese so money is as important as air in most situations.

McCoy - congrats!

Jaboney - we live there, and I suspect this is a bubble situation. We could ride and guess where it stops, sell now, or ignore it and still be happy enough.

I guess its a nice decision to have. Still no idea which way to jump though.

If you really like it and you’re comitted to staying, then hold it. Nothing lost. You like it.

If the answer is anything else, sell it. My guess is the long-term trend for HKG property is flat, which is really down. What to do with the proceeds? Dunno. Being cash rich in a poor economy is a nice thing.

[quote=“Edgar Allen”]The place is gorgeous, we spent a fortune renovating it to the way we wanted it, and its plenty big enough for the next 3-5 years.
[…]
Jaboney - we live there, and I suspect this is a bubble situation. We could ride and guess where it stops, sell now, or ignore it and still be happy enough.

I guess its a nice decision to have. Still no idea which way to jump though.[/quote]

Given that this place is big enough for now, but you’ll need a place when the little one is old enough and may not want to live through a second renovation, why not start looking now? If you find something you like, great. If you find something you can fix up, buy it, do it, then sell this place. If there’s nothing out there you like well enough, stay where you are.

I’d say the same as J; get out there and look around to see if there is anything out there you like. You seem pretty sure you will be moving in 3-5 yrs, that makes taking profits on your current property a pretty attractive proposition. Not having a mortgage is pretty damn nice, too.

It’s a tough one, since you obviously like the place so much…

From what I’ve seen of China recently they have a huge property bubble, overdevelopment in every city. HK being on the receiving end of all this cheap cash floating around. When that busts so will HK. I would say there is a 95% chance of it busting within 5 years and a 70% chance within 2 years (these are my feelings and from reading various sources online). I’d say take the profit if you can now which must be very substantial, then rent for a couple of years and you will pick up a great place and have lots of change left over. Otherwise you may be living in your current place for 10-15 years…if you are happy with that risk.

This is very close to what I am thinking.

I usually see property as a long term play but to make such a big profit so quickly has messed with my head. I have no issue with holding the pace for 20 years or more and bought it with that intention - but I suspect what I can make today will be about the same as 10 - 15 years from now.

Maybe someone will buy it and rent it back to me :slight_smile:

We are going to the UK for 10 days so have suggested to Mrs E that we put it on the market while we are away and see what interest we get. Will keep you all posted - and thanks again for the input

So its some time since I posted but we accepted an offer yesterday. Looks quite likely that we’ll be coming back to the Island. Not sure what I will do yet other than study some Mandarin and work on some personal pet projects. :slight_smile:

New beginnings. Congratulations!