Investing in Macau Property
Is It Time To Buy In Macau.....
As the market nears bottom, do you step in or wait ? This is the most popular question that Clients ask us right now. One thing is certain. We are not at the TOP of the market, the question is, are we at the bottom ? Well if its not the bottom, it is pretty close ! If you are buying a home, now is a good time to start looking. If you are looking for an investment, there are some great deals out there. We have been buying an average of 1 property per week for investor clients, and the yields are fantastic when you focus on thatend of the market. Investment property is available from as little as HK$750,000, and rental yields can be as high as 10%. As property investors and landlords ourselves, we understand the needs of most investors who are looking for above average returns from the Macau property market.
Despite the Global Outlook, the future still looks extremely bright for Macau. When you consider that Macau has limited land space, and that the population of Macau is set to grow from 450,000 residents in 2004, to 600,000 by 2010, AND that the level of foreign investment pouring into Macau is estimated to exceed US$5 Billion by the same time........that is a reasonable recipe for growth. |
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For those of you interested in hard data, we have provided some, 'Macau Facts & Figures' for you. You can also receive regular information on Macau and the Property Market when you join our list of readers of our Newsletter. You can even receive properties the moment they hit the market as they are listed on our website through our Mailing Alerts. Arranging Financing In MacauMacau residents can usually borrow 80%-90% of the purchase price dependent on the property type and security offered, and overseas investors are more likely to obtain 70% financing. |
We have established relationships with Macau banks, and we help our clients secure finance at very competitive rates.
Multiple Investment Opportunities
We help our clients invest in the market in a number of ways, which I will skip through first, and then give you more detail below on each subject:
1) We represent our clients (usually the 'buyer') and help them find a suitable investment property
2) We renovate, lease out and manage properties for clients
3) We sometimes partner with clients to purchase property, and share risk with them.
4) Occasionally we help one of our clients sell a property they own.
5) There are also some Macau Property Investment Funds available.
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1) We Find Great Properties For ClientsWe source properties for our clients, handle the transaction and assist in the purchase or sale of a property. When we say we source properties, we really mean it. We reject 96% of the properties that we research.As a general rule, for every 100 properties we research, we find that 14 are interesting on paper, 4 turn out to be suitable properties for investment because it is a property that:
- has or will have a high rental yield compared to the market
- is undervalued by 10% or more
- can be developed and will be worth significantly more after some renovation
- has significant Capital Growth potential
- is in prime location
Of the final 4% that meet our criteria, only half are suitable for clients From these 4 properties, it is usual for us to make offers and work with our clients to get the best possible price, and we set target prices for those properties. As such, we usually close on 2 of the 4 remaining deals. As brokers, we work ALL possible sources of the best properties Our agents search for suitable listings, they are constantly in contact with the most credible agents in Macau, they are talking with Financial Institutions, Property Developers, Websites and other Media, and we also receive listings direct from sellers through this website. We have also put together investment portfolios, and found suitable investment vehicles, for our clients upon their request. For example, you may require a portfolio of properties with a maximum value $2 Million returning 7% in rental yield. We will put together this portfolio one property at a time if necessary, or we may split up a larger number of units o achieve this in one go. Investing in broker services. We represent our Buyer clientsIn general, we aim to make our clients in excess of 10% on every property when they purchase. With properties ranging from $1,000,000 to $45,000,000 that is a significant amount of money. On average, we deem 96% of the properties we view as unsuitable, leaving only the top 4% to make offers on for clients. As brokers, we are looking out for our clients best interests, and our fees are paid as % of the property purchased. When you go to an Estate Agent, they are looking out for the Sellers best interests, not the buyers. We stand by every transaction we make for our clients. Remember, we offer a money back guarantee if our clients are not satisfied with our services. |
What You Can Expect Of Us
(this is who we are) - We play a fiduciary role for our clients. We put the clients interests ahead of our own. For instance, we offer all of our clients a money back guarantee on all services. We do this for every service with every client, so that we hold ourselves to the highest possible standards.
- We value our current clients above anything else. We expect our clients to be so completely satisfied with our services, that they refer 2 or more friends of similar character, knowing that they will be looked after. We don?t waste time and money looking for new clients; they come to us by referral because we look after the current ones.
- We also look after our tenants, and help them create a ?home? in Macau. We become a trusted source of valuable information for our tenants and the friends that they refer. We respond to their requests quickly and efficiently. We don?t take on tenants or clients who do not have a similar value structure to our own. We have been known to ?fire? tenants and clients who broke the golden rule (see below)
- Finally, the Golden Rule. We do unto others as we hope they would do unto us. We treat others as we would like to be treated. We give the level of service that we would like to receive.
| | Macau Facts & Figures | Population Growth:
- Year 2000 380,000
- Year 2001 380,000
- Year 2002 380,000
- Year 2003 400,000
- Year 2004 410,000
- Year 2005 430,000
- Year 2006 450,000
- Year 2007 480,000
- Year 2008 520,000
- Year 2009 560,000 estimated
- Year 2010 600,000 estimated
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| 2) We Renovate, Lease Out And Manage Your Property For You
We work with our sister company, Juliet Macau Company Limited (JML), a Property Management and Interiors company, to manage properties for clients. For your information, JML has the same shareholders as RLL Ltd.
Over $200,000,000 of Macau Property under management
As the retained Property Management Company, there are a menu of services on offer to clients. Having someone on the ground in Macau to represent your interests is key to being able to sleep at night, knowing your investment is in good hands.
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The management company will:
- Ready your property for prospective tenants to see
- Advertise your property to a suitable market
- Introduce your property to prospective
tenants and show them around
- Negotiate on your behalf
- Finalize the rental agreement with tenants
- Take care of your property on an ongoing basis
- Handle all of the tenants issues and problems
- Arrange any work needed on the property, including all repairs, upkeep and maintenance
- Collect rents and keep accounts on your behalf
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| Macau Facts & Figures | Population Growth:
- Year 2000 380,000
- Year 2001 380,000
- Year 2002 380,000
- Year 2003 400,000
- Year 2004 410,000
- Year 2005 430,000
- Year 2006 450,000
- Year 2007 480,000
- Year 2008 520,000
- Year 2009 560,000 estimated
- Year 2010 600,000 estimated
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Creating A Desirable Home To Maximize Rental Returns
Anyone who has tried to create a warm and inviting home will know how difficult this job is, especially when starting with a ?blank canvas?. Luckily, we have interior design professionals and architects on our team to care of this for our clients, and its nowhere near as costly as most people imagine |
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The Partnership is usually between 3 party?s
In a partnership, we generally break up property ownership into 3 parts;
- 'Owner 1' Invests the necessary cash according to the budget and forecast
- 'Owner 2 ' Invests the necessary cash according to the budget and forecast
- And finally, we play the role of 'Owner 3' Invests time and expertise to find, purchase, arrange finance for, decorate, find a tenant
for, and lease out the property.
| All parties share the risk equally, and all are responsible for the re-payment of the loan. We are able to obtain finance up to 90% of the purchase price, and are usually able to negotiate very favorable rates from the local banks with whom we do so much business.
All cash is 'On Loan' to the partnership, and is re-paid first before payment of any other debts or profit share. The remaining profit is split between the 3 parties. This is an ideal way of testing the market, since the entry level is very low, and the risk is limited.
Feasibility / Budget Outline
We will prepare a budget and forecast for the investment, ready for the investors approval. In general, the entry level is US$20,000 / HK$150,000.
Arranging Financing
As a local company, we can usually borrow 80% - 90% of the purchase price dependent on the property type and security offered.
We have established relationships with Macau banks, and may borrow money anywhere between Prime - 2% & Prime - 3%, again dependent on the property. The use of bank financed leverage has allowed RLL, JML and it's investors to profit from the upturn in the Macau economy
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We hope that this has been informative for you, and may tell you a little more about JML. If you would like to get to know us better, we would welcome the opportunity to talk with you in person to see if we can establish a win / win relationship. That?s how we all prosper.
4) Sometimes We Sell Our Clients
Properties For Them
Occasionally we help one of our clients sell a property they own. If this is the case, we let everyone know ahead of time that we are representing the seller.
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However, we rarely advertise this property to our own clients, since we will get our client the best possible price and therefore the property would not represent a 'bargain'.
As such we would not recommend it to our buyers. There are exceptions, such as when one of our clients needs to sell a property quickly due to personal circumstances, and is willing to offer a great deal in return for a quick sell.
5) Property Investment Funds
We also work with some property investment funds that offer good returns on a case by case basis. Click here and send us an E mail if you would like to know more on the current Property Investment Funds.
Juliet Risdon, Director
Risdon, Lawson & Lo Ltd
Macau Real Estate Brokers & Property Investment |
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