I received a call from a real estate agent today saying he had a firm offer for one of my properties. Leaving aside the question of where he got my mobile number and the fact that I have no interest in selling the property, the offer is at a level which indicates a solid increase in price. Although I have not kept precise records of the cash flow on the property, a rough calculation would suggest that accepting the offer would result in a realised return (net of all costs etc) on capital invested of somewhere between 21 - 24 % pa.
I'm not interested in selling for the following reasons:
1. what would I do with the money? I would just turn around and look for another property to invest in. Unless I am trading up, all I will end up doing is incurring a lot of transaction expenses;
2. I have sold one property this year already. If I make a habit of selling properties, I risk being classified as a trader for tax purposes. If that happened, I would have to pay profits taxes on all future property sales (excepting our home). Even at Hong Kong's middle of the range tax rates, this is a very high cost.
I wish all my investments would do this well.