Friday, February 05, 2010

New property purchase

Against our expectations we managed to find a property which was available for less than bank valuation. Based on a combination of the bank's valuation and very recent sales in the same building, we negotiated a purchase price which (in our opinion) gives us the car parking space for free as well as a discount on the recent interior decoration. It may not be the bargain of the century but it represents reasonable value in the current market.

The property is located in the western Mid-Levels, is less than 20 years old, is well maintained, is within walking distance of Pacific Place and Wanchai and (as mentioned) comes with a car parking space.

The flat (but not the car parking space) is also leased to a corporate so we will not have the usual period of post-completion vacancy while we look for a tenant and redecorate.

Mrs traineeinvestor and I will buy this property as a joint venture. We are currently shopping around for mortgage financing.

Completion is scheduled for mid-March.

4 comments:

thriftygal @ Chasing Prosperity said...

Congrats on your new purchase. Is this for some business venture or are you going to live in it?

traineeinvestor said...

Hi

Thanks for dropping by.

It's for investment purposes. Since we have no SS equivalent in HK and neither of us have pensions, we have to rely on our own savings and investments for retirement. The original plan was to have about half of our retirement income from rent with the balance as dividends and interest from shares and bonds.

Cheers
traineeinvestor

James said...

How has your mortgage hunting come along?

Currently, you can get a 2% interest rate (Prime) with a 1% cash rebate.

traineeinvestor said...

Hi James
I have gone with a one month HIBOR + 0.65% facility with 0.6% cash rebate. Current interest rate is about 0.73% which is pretty cheap. There is a cap of Prime - 2.75%.
Cheers
Traineeinvestor