The good news is that the new rent is 12.8% higher than the old rent.
The bad news is that I am not actually any better off because:
- there will be a five week vacancy between tenancies
- I have to pay the agent
- I have to pay the stamp duty
- I have to pay for the flat to be repainted, for the airconditioning units to be cleaned and some other minor touch up work
I would have been better off keeping the existing tenant at the old rental (which was not an option).
Still, it could be worse - I could have had an extended vacancy or a smaller rent increase.
It seems you have quite a few residential prop; why not diversify by eg owning some higher yielding good quality REITs eg Champion etc.
Good question. The short answer is that I preferred the developers and property companies as they were trading at bigger discounts to NAV - Henderson, K-Wah, Sinolink, HKR International and Tai Cheung are all in the portfolio. The dividend yields may not be as good as the REITS, but you also have to remember that the REITs are paying out at least 90% of their income while the property companies are paying out much smaller percentages and retaining more for future expansion.
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