Lord Of the Land part 3

Choosing each apartment was a different experience. The Hung Hom estate has been open for six years, so we inspected the apartment, toured the grounds, talked to a couple of neighbors, and did everything you would do when renting or buying an apartment.

The Ma On Shan estate is not open yet, but is mostly built. We could enter the apartment, but it was unfinished, as were the landscaping and swimming pool. Since it is incomplete, they had show flats in Tsim Sha Tsui. Obviously, inspecting a show flat would be pointless, but we will be able to inspect the actual apartment once it is complete. We already bought it, but there are legal provisions in place if what we bought does not turn out to be what we get.

The Kai Tak estate is currently a construction site. We could not even set foot on the property. They also had show flats, as well as 3D models and a lot of artist's renderings. Buying an apartment that has not yet been built takes some imagination, but again, if they cannot deliver, we get our money back plus a little extra for our trouble. Some of the richest people in Hong Kong, including politicians, like to buy into new developments. They would never stand for getting robbed, and even though they spend far more than we did, the laws protect all of us.

We have six months from completion date until final inspection date, so Ma On Shan and Kai Tak are going to require two separate trips to Hong Kong. Fortunately, Hong Kong has to let us in no matter which direction the viral winds blow. The only problem is Taiwan. They never have to let us back in, though they most likely would. As long as Hong Kong does not go American, we should be OK.

The developers for the Ma On Shan and Kai Tak estates gave us books full of information on not only our apartment, but every other apartment on site. If, for some strange reason, I want to know the induction hob's brand and model number in Tower 3, 15F, unit D, I could. Even though our apartment is a different floor plan on a different floor of a different tower.

It is a Miele KM6115. I looked it up.

Since we bought the Hung Hom apartment from an estate agent rather than the developer, we only got information on our specific unit and the general estate. We know next to nothing about the other apartments, and since they are several years old, no one else does either. Until the owner puts it on the market.

Legally, the rights and responsibilities of landlords in Hong Kong are more or less the same as the United States. We have to provide a livable space and fix anything that breaks down enough to endanger that. Tenants are responsible for minor cosmetic issues. We can't evict them without cause, which are mostly common sense issues, and they have to pay rent on time. Everyone can haggle and negotiate for whatever they want in the beginning, but once a lease is signed, that is where the authorities look in the event of a disagreement.

Something different is the way Hong Kong handles utilities. Where I come from, they don't turn on the apartment's gas and electricity until you move in and pay the gas and electric company. Here, the electricity is always on. If the apartment is empty, you can turn off the breakers, but the electric company is always supplying juice. That means the owner has to pay the electric bill until someone moves in and takes over. Fortunately, utility bills, in my experience, are far cheaper in China than in Minnesota, mostly because of heat in winter and probably more than a little political bullshit. The water bills in both countries are practically nothing, but ironically, the Ma On Shan water price is slightly more than Kai Tak or Hung Hom, even though Ma On Shan is right next to one of the largest reservoirs.

One thing we will never have to deal with as owners is furniture. Since these are all family apartments, they will come unfurnished. Most families have their own furniture, and even if they do not, they all have their own tastes. The property management company at Hung Hom has a furniture package that renters can choose, but that has nothing to do with us.

How much to charge for rent was an interesting issue. When you look at websites advertising apartments for rent, you see essentially the same apartment at wildly different prices. As it turns out, the property management companies look it up on their spreadsheets and pick the highest number they can find. My first apartment in Hong Kong was in an independent building. I think that owner just picked the price out of a hat. When we were given a price range for comparable units in the Hung Hom estate, we told the property manager to go with the lowest number. That might have been the first time anyone told him to aim low.

Our goal is not to make a profit from rent. That is pretty much impossible. If you buy a ten million dollar apartment and charge $30,000 a month in rent, it would take 30 years to break even. Maybe if you own the entire building, you can make some money off rent, but independent buildings around here tend to have lower rents and the more expensive buildings are in estates that almost no single person could own. And only one of our apartments is ready for tenants. It will be more than a year before the Kai Tak apartment is habitable. Even if the property manager finds someone to move in on the first available day, that is still one year of no income whatsoever. The profit only comes from selling the apartment at the right time. The trick is finding the right time. Everyone assumes the Kai Tak estate will be worth far more after the neighborhood is fully developed, but it is still gambling. The Ma On Shan apartment is almost sure to increase in value, but there is no way to know if the neighborhood will ever become popular. The surest thing is Hung Hom, but since we did not get in on the ground floor, we will never make as much money from that one as we potentially could from the others.

Not that it really matters. We would like to make a few dollars eventually, but we did this to have a financial stake in Hong Kong. We are never going to get rich from any of these properties. To make any real money, we would have to sell them at the right time, buy something else at the right time, and then sell that at the next right time, repeating as necessary. For now, we have reached our goal. As long as we do not lose everything, I am satisfied.