The rental case is being presented on the basis of HK$23,590 a month, but I hesitate because there is so little margin for error. The property is a 3-bed country home priced at HK$8,463,000, so the headline yield is only about 3.3%.
A higher financing cost could hurt immediately, while an optimistic rent or vacancy assumption would weaken the income over time. I have allowed for management, routine upkeep, empty periods and major repairs, but I’m unsure whether those amounts reflect this particular location and property. Which documents or figures would you insist on seeing—an existing lease, comparable completed lettings, insurance costs, maintenance history or something else—before deciding whether the cash flow is credible?
A higher financing cost could hurt immediately, while an optimistic rent or vacancy assumption would weaken the income over time. I have allowed for management, routine upkeep, empty periods and major repairs, but I’m unsure whether those amounts reflect this particular location and property. Which documents or figures would you insist on seeing—an existing lease, comparable completed lettings, insurance costs, maintenance history or something else—before deciding whether the cash flow is credible?