Dear Lum Sir,
Hope you all is well.
Me and My wife ages are 36 and we will have our first baby born end of this year.
myself 33K per month + 10-15% discrepany bonus+freelance income average 5-10K per month,
My wife: 17K per month+10-15% discrepany bonus. Our job are fairly stable.
Net Rental Income (after management fees, rent and rates, tax):
Car Park x 4 at Sha Tin, Net inome: $1000 x 4 per month
Idustrial building x 1 at KowloonBay: $6000 per month
Village Residential x 1 at Tai Shui Hang: $8700 per month
Total Income: $69,000
Assets and Liability:
2 rooms residential x 1 at Tsuen Wan: Assets Value 3.8M, Mortgage 2.2M, monthy repayment H plan $9000 + P plan $ 1900, total $11000. The property was purchased 8 year ago at the name of me and my wife name
KowloonBayIndustialBuilding: Assent Value 2.5M, no mortgage. The property was purchased two years ago.
Car Park: Not quite active transaction recently, estimate $330,000 x 4. they are purchased 5-8 years ago.
Village Hse at Tai Shui Hang (Ma On Shan Line) : Not quit active transaction, estimate $2.4M, mortgage 1.3M, purchased half year ago, P plan, 2.25%, monthly repayment $5800
TsuenWanIndustrialBuilding: purchased at 3.0M (@2800 x 1072), mortgage 1.5M it is going to complete transaction at May 2013. Estimate montlhy rental $10000, monthly mortgage repaymnt $$6700.
Shared Industrial Property at Sun Po Kung: HKD 300K, no mortgage, no rental.
Cash: 1.5M, Stocks: 1M,
Management Fee, Rent and Rates: $2900
Household Expenses: $22000
Saving: average $20000 per month.
Short Term Target:
1. Selling Tsuen Wan I building to realize cash.
2. re-mortgage of KowloonBay I building to get 1.M cash. Together with cash on hand to invest on bond or REIT to earn 6-8% annual return.
3. Buy a three room hse for bigger family size.
Sell the Car Park and Village Hse (after 2 yrs no need to pay SSD)
Long Term Target:
1. Keep the kowloonBay, Sun Po Kong (Long term prospect of East Kowloon) and Tsuen Wan residential (H plan low interest) for long term investment and rental purpose.
Target to have 5-6 quality residential or I building. Achieve 100% Rental income vs current salary for retirement.
My worry is without selling the Tsuen Wan I building, it is challening to buy three room residual unit because my credit limit is already stretch. However, it is difficult to sell the builing due to new government policy.
Do you have any recommendation to realize my taget and any other way on optimization.
Thanks a lot for your recommendation.
Dear Lum Sir,
I have some further thoughts with supplement information.
1. Regarding the ibuilding at Tsuen Wan, although I have paid $300K (10% disposit), do you think it is good idea not to complete the transaction (complete date 6 May 2013), that is to give up the deposit so as to retain 1.2M cash and save power. This is for purchase 3 rooms later. My worry is that given the current market sentiment, it is difficult to sell the i-building in short term and the value of the property will reduce to 2.7m or lower. Is it more wise not to complete transaction? What do you think?
2. Regarding the village house at Tai Shui Hang (Ma On Shan Line), it was purchased at 1.9M, 450 square feet, property ages were about 13 years. Based on previous article written by you, village hse and car parks are (NOT) good assets due to limited financing flexibility. So, i think it is better to sell once the end of SSD.
3. My current residential is 10 years ages at Tsuen Wan. Although it is deemed to be new, it is only single block building. As compared with other private estate at Tsuen Wan, the property value doesn’t grow satisfactory rate in last few yrs. Estimated rental value is 12-13KPM. Do you think it should be kept for rent or sold it to realize cash for three house residential.
If you were with with current assets and cash on hand, what do you do to optimize the portfolio.