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berklayzie
Newbie
Joined: Nov 05, 2009
Posts: 2
Status: Offline
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 Posted:
Nov 05, 2009 - 11:37 PM |
 
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| Post subject: Should I buy the apartment I am renting? |
I'm thinking of buying the apartment I am renting for investment purposes. It is in a good location near the West Nanjing Rd line 2 subway station. It's in an old house and is 70 square meters with 2 bedrooms and 1.5 bathrooms. The owner is asking 2 million RMB. I have heard that if the government decides it wants to bulldoze this place in order to put up something more modern, there is a decent payday for the owners. Also, I feel that because it is located near the city center, it is a good long term investment. Does buying this apartment seem like a good investment? |
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monalisalee
Veejay
Joined: May 10, 2005
Posts: 2016
Location: Shanghai
Status: Offline
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Nov 06, 2009 - 12:35 AM |
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Hmm. Little scary buying into old building, as you do not know what the payout will be. 2 mill. is far too much to pay anyway. That is 28,500 mtr for an old building. NO WAY.
I believe GOOD real estate is a good investment here.
I bought into a 2 year old apartment 2 1/2 years ago, for 600,000, and now valued by R/E agents at 1.8 mill. It is also 70 metres, and I think that was a good investment.
Remember here you will NEVER own the land, (unlike other countries) You are buying a 70 year ownership of a building, which CAN be renewable.
In your case, I would be very careful, as you do not know When or if there is re- development, so you could be up the creek with no paddle.
I would be very careful of buying into old buildings. |
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berklayzie
Newbie
Joined: Nov 05, 2009
Posts: 2
Status: Offline
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Nov 06, 2009 - 12:22 PM |
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Thanks, that was the answer I was looking for. |
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compsolutions
Rocker
Joined: Mar 07, 2009
Posts: 690
Location: Shanghai
Status: Offline
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Nov 07, 2009 - 03:13 PM |
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Are you sure you're allowed to buy it?
Most old houses/rooms in old houses are Shi Yong Quan (right to live), not Chuan Quan (right to own).
Shi Yong Quan can only be sold to Shanghainese, or the rare few foreigners holding a Shanghai Residence.
See if your building is nominated for being a listed building. I bought an old apt in June in a listed building, its not 100% guaranteed never to be redeveloped, but it does guarantee a huge payout if they do..
Price doesn't seem too bad, but without looking, who knows.
Do be aware that the block on Nanjing Xi lu / Maoming lu is about to get destroyed and redeveloped, so if its there, its definitely getting knocked down.
Don't expect the government to pay you if they redevelop though, thats not how it works. The developers pay the people moving, not the government. Each person basically gets to negotiate prices they get based on the number of hukou's per apt. So you'll have a 20 sqm place with 10 hukou's, and you get 20sqm x 10 x sqm price. As you can imagine, more than a fair bit of fraud and cheating goes on..
What usually happens is that the later you leave, the more money you get, but its not unknown for developers to hire countryfolk to beat the crap out of the recalcitrant last few people if they don't want to play the game.
I lived in a city block off of Ruijin lu a few years ago that was getting torn down. I paid the actual landlord 2 years rent upfront, and I was leasing from someone else, who was leasing from yet another person, so he didn't care what went on. All bills were essentially paid by the developer to keep all the people happy - so I didn't pay electric, gas, or water - the landlord said don't bother!
I've had one friend who's had 2 places he's owned destroyed. The first one is now a petrol station (which is also getting destroyed last time I drove by), if he was one house down, he'd still have his place. Excellent location on Weihai / Yanan (this was pre-yan an gaojia), just unlucky. Got next to nothing for it though. 20 sqm x 4,000RMB about 10 years ago.
Which couldn't buy you anything like that even back then.
His second place was even better. His dad gave him his grandfathers place 2 or 3 years ago. He went to go look at it, and couldn't find it. Someone had redeveloped the entire area, and illegally destroyed their house! After a few years of legal negotiations he now has an apt in the new complex from the developer (paperwork was hard to prove, as was in the destroyed house). |
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gino
Reacher
Joined: Jan 31, 2005
Posts: 239
Status: Offline
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Nov 07, 2009 - 08:20 PM |
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besides the legal legal aspects that compsolution laid out perfectly, i would not suggest any old apartments in shanghai. houses and lane houses maybe. apartments are part of a bigger animal (building) and you can be sure the wiring and pluming has museum quality. |
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compsolutions
Rocker
Joined: Mar 07, 2009
Posts: 690
Location: Shanghai
Status: Offline
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Nov 07, 2009 - 08:34 PM |
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gino
Reacher
Joined: Jan 31, 2005
Posts: 239
Status: Offline
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Nov 07, 2009 - 10:07 PM |
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@ compsolutions, i did not know that... good to know. thanks. |
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