I’m hoping to immigrate soon to Taiwan under the Gold Card scheme. I don’t speak Mandarin so my first few months, maybe a year, will need to be spent with Mandarin classes.
I have some money which could be used to buy-to-let property in Taiwan. My questions are:
What is the most stable and trouble free rental demographic in Taiwan? Young couples with maybe 1 child?
What sort of properties would appeal to this demographic? Two bedroom apartments?
If the property lies vacant with no tenant, what monthly charges will need to be paid anyway?
In the event of a natural disaster in Taiwan, what happens to damaged property? Are repairs or compensation covered by the government? Or does it depend on the individual homeowner’s insurance policy?
If you had say US$1M to spare, how would you suggest investing it so that you maximize your monthly rental income?
Are you buying two houses it seems? Where are you from as well? If US, which state?
Most demographics are pretty safe in Taiwan. Families in particular. Single students as well are great.
Two bedrooms for families, Taofangs (flats with just a bedroom and a washroom) for students. They’re often the highest yielding compared to the price.
It really depends.
Depends where and what you get. Rental yields are lower in Taipei compared to purchase prices. Taipei suburbs have higher yields and some places rents are higher than mortgage payments. Could go into more detail if you want, I kinda want to know more what your plans are.
Mr youtuber also only looks at Taipei and fails to take into consideration the varying market conditions.
No. Taiwan will probably be like Japan where the smaller or rural counties will shrink but Taipei and big cities will continue to experience growth because that’s where the jobs are.
I do. It’s fairly easy, put up ad on site like 591 or use an agent that takes commission. Then negotiate and sign a contract.
Hydro, water, property tax, building maintenance fees.
Insurance is like $1500 a year. TWD. Covers natural disasters. Depends on insurance policy.
Give it to me. Jokes.
Uhhh. I would buy my property for sure because you HAVE to live somewhere, but you don’t have to live in expensive Taipei too. Getting a mortgage that is roughly equivalent to rental prices can help free cash for other investments. There are cheaper places outside Taipei. I’d probably look at traditional things like mutual funds or hire a financial advisor to invest for you. I don’t expect housing to significantly change in the near future.
I would probably want to spend about US$0.25-0.5M on a property for myself, with the price depending on whether I buy in Taipei or Taoyuan, Keelung, etc.
I’m expecting my first year to be spent learning Mandarin intensively, with maybe some part time work.
The remaining US$0.5-0.75M I would like to spend on property which would give the best rental yields.
I’m basing my prices from the Century 21 Global website, because I don’t understand Chinese to use the 591 website.
I would generally advise you not to. Put simply Taiwan has some of the lowest rental yields in the world. According to this, Taipei is second from bottom of their list of global cities, and this has Taiwan dead last. You would probably have much better luck buying and renting a property in your own country. If despite this, you still want to do it, Marco gave some good advice, try to buy out of the city centre where there is better value to be had, and the best of luck to you.
If renting, try to rent out in a spot that can be used for business. So many houses here are row housing styles and the first floor is rented out to a business and upper floors for residential. But such places in high rent areas probably wont be had for the price range. Taiwan does seem to have a very skewed ration of buy prices vs rent, at least for residential.
Actually, to be honest, he could actually make money by buying his living house, then getting the money back by buying another house under a mortgage by putting his living house up as collateral, then renting out the second one while taking that cash and putting it into other inflation-beating investments, thus making more money.
If done properly and wisely. Even if yields are low, if leveraged properly, it can be a second source of investment income by killing two birds with one stone.
@Snowfox, do you have alternative forms of income as well?
In the big cities I think it would hard to exceed your mortgage payment with rental income, and outside of them you just have to be smart/lucky to find an area with growing demand before it gets expensive. I honestly just got lucky. The government reclaimed a lot of land for an industrial park near where I bought my properties and lots of people were forced to move into my area. Prices doubled in a year and it made it very easy for rental income to exceed the mortgages.
I’ve had good luck with young childless couples that receive government assistance with rental payments. Of course their household registration must be in the rental and you’ll have to report taxes accurately, but they take good care of things and always pay timely. They seem to prefer two bedrooms because a third bedroom makes it too expensive and a single bedroom can be cramped if they have lots of things.
If I was thinking of buying somewhere to rent out, Taiwan would be one of the countries at the bottom of my list, due to the vastly overinflated prices vs terrible rent yields, coupled with shoddy building work.
Also, why are you thinking about putting that much money in a country that - let’s face it - could be facing a war within the next few years?
Each to their own and I’m hoping for the best, but I’m planning for the worst and moving the bulk of my assets in the other direction.
I’ve tried being a long distance landlord before. Basically you have to pay an agent to handle things for you, and when you factor in wear & tear maintenance costs, it wasn’t so profitable. Also even though the property I was renting was in a good area, rented by professionals and the letting agency was reputable, a lot of damage was discovered after the deposit was returned to the tenant that wasn’t spotted by the lettings agency.
Of course there is a risk of war in Taiwan, but where else can I invest it in? Almost everything is being eaten by inflation. In the West there is both high inflation and the large national debts. Taiwan in contrast has a national debt just 28% of the GDP
In my view war is a possibility but the national debts are only getting bigger and one day may even result in hyperinflation.
I do understand the dilemma with regards to inflation and real estate is the way to go, I guess our risk profiles differ. I’d prefer to own outside of Taiwan and risk bad rentors than risk owning in Taiwan at the moment.
The economics of buy to let don’t make sense in Taiwan so if you’re trying to make money don’t do it.
Reasons I wouldn’t recommend:
Prices are overinflated and there is always a risk for a price reset
Rental yields are terrible in large cities like Taipei. Sure you can look into other areas but then location risk increases further.
China factor; uncertainty is not good for any investment
Wear and tear will be substantial here; worse than in Northern Europe at least based on what I see in rentals
If you have 1m USD I would recommend that you put it in dividend growth stocks / etfs or a similar class of invest will yield you 10% p.a plus over time and reinvest the dividends. Way better risk adjusted returns without dealing with the hassle of being a landlord. Rent a nice place in Taiwan instead and enjoy!
Well property prices are inflated and as such not exactly a hedge for inflation. You just risk being at the peak of the market where interest rates can’t go any lower…
Logically the prices are overpriced but the market keeps going up year by year. You will see posts from 2000s onward here saying the same yet prices keep going up. It’s been an excellent investment so far.
Asian countries value homes as a store of value so logic doesn’t apply to these markets.
National debt to GDP is separate from Household Debt to GDP. In Taiwan the figure for the later currently stands at around 100% currently? Taiwan Household Debt: % of GDP, 2000 – 2022 | CEIC Data (this only goes up to 2020). If the economy goes bad for a couple of years, the banks in Taiwan will be on the hook for all the mortgages they issued. The government then will either let the banks go to the wall or they’ll bail them out just like in the West, then that 28% will go up FAST.
and the medical facilities and convenient transportation options that an aging population needs. Taipei prices are high but they are high for a reason.
but it is still different than in say the US mortgage collapse. banks here control money far tighter. still a bubble, but the entire legal framework, government involvement, personal wealth (meaning outside of government) and so ona re far different factors. nevermind population density on this small rock. if it all goes bust, the gov will make a killing as the KMT did in the past, I doubt they will even flinch after 5 years. As an investment, sure. these things are all considerations. but if the worry is getting your assets pulled out from under you. Iwould trust land over stocks any day of the week personally. especially here!