4 Buy Low, Sell High Strategy (Resale Condo)

How to buy a condo at low prices and then sell it at above market value later? Below are 4 Buy Low, Sell High strategy for your consideration when buying a resale condo.

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     Table of Content

• Buy Early into GLS Vicinity
• Superstitious Beliefs
• Not Less than 80
• Healthy Transactions

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📌1. Buy Early into GLS Vicinity

• You will regularly find out about new launches through flyers and property agents
• What is less known is that you can get to know about these sites at least 1 year prior to receiving these flyers and info from real estate agents.
• State land is released for tender through the Government Land Sales (GLS) programme.
• You can access these upcoming GLS sites at the URA website.

• After winning the land bid, the developer will take at least 1 year to plan.
• At this point, the details and even the name of the project are usually not finalized yet.
• Many property portal sites or agencies will rush to report on these winning land bids.
• They will also attempt to calculate the breakeven prices and try to estimate launch prices.

• When you see a big price difference between the resale condos nearby with these future projects, you may want to consider buying into this particular area early.
• You will see a surge in demand for nearby resale condos after every successful new launch.
• Why not have get a head start and an advantage?
• You will likely buy at lower prices and with more choices if you act fast.

   📌2. Superstitious Beliefs

• Some Chinese believe in Fengshui or geomancy and Indians have their Vastu equivalent.
• The number 4 is avoided by some while 6 and 8 are associated with prosperity.
• Regardless whether you are superstitious or not, they will have an impact on the price of your property when you sell.
• These are pragmatic considerations.
• Some buyers will not like buying next to hospitals or places of worship.
• You may not mind having a temple in front of your house but this may deter a staunch Christian family from buying from you in future.
• You must bargain low if you think others will low-ball you when it is your turn to sell.
• In Hong Kong, “haunted homes” are sold at steep 30-40% discount.    
• This means that when the price is right, any property will find its rightful buyer
• At the end of the day, it is never wrong to enter low.

📌3. Not Less than 80

• Look for a resale condo with at least 80 years of remaining lease.
• This is important for buyers who are not sure whether they will be staying in that place for good.
• Older condos with less than 60 years lease face restrictions with bank loans and CPF usage.
• You can stay there for about 10 years and think about your exit plan later
• With a remaining lease of 70 years after your stay, you should be able to sell at a better price (i.e. sell high) before the CPF usage and loan limits kick in
• If you sell an old property with less than 60 years remaining lease, your buyers’ pool will be limited and the buyers will be mostly retirees who are cash-rich

📌4. Healthy Transactions

• Before offering for the condo, check the number of transactions per year in the development.
• Is this number healthy?
• Smaller developments with no transactions in past 12 months will affect your resale value in future.
• Such cases are common in boutique apartments with less than 50 units.
• I, once, handled a case (sale) in Park Court condo (D14) where there were no recent transactions.
• In the end, the bank based their valuation on a unit that was sold a few years back, which was much lower than recent average transactions
• In the unlucky situation that your distressed neighbours sold their unit at below market prices, you should delay your sale for at least 12 months or wait until the average prices are brought up by more transactions that are sold at market prices
• Personally, I prefer to invest in bigger developments with more units
• Having more transactions will reduce the negative “average effect” when your fellow condo owner sell his unit at fire sale prices.

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