Another Lesson In Buying Overseas Properties: Please Visit the Place First!

There are many exhibitions in Singapore, Hong Kong and Malaysia selling properties in the UK, US, Malaysia and Australia. Buying properties in Malaysia is not so tricky if you just drive across the border to look at the place. But for the US (New York), Australia (Melbourne) and UK (London), it is imperative that you visit the place. There are many condos in New York being marketed here. Many of them are in the Lower and Upper East Side Manhattan. My suggestion is to make sure that the place has not been devastated by Hurricane Sandy. Also, a New York apartment of around 700 SF could cost around USD650k. The gross rental could be around 6.5%. But the Home Owners' Association (HOA) or conservancy fees could cost USD17,500 or more every year! The net yield as a result is only 0.8%!

Then there's London. When you buy off-plan and it's in an area that you've never visited before, it's best that you visit it first, even if it's a regeneration area. In London, regeneration can be very patchy. An area could be previously a slum, occupied by gangs, council flats, unemployed youths, and there are single buildings amidst the slums which are new. However, it will be difficult to attract tenants until the regeneration is complete. Even if there are new transport links to the area, new shopping malls and offices, if the general economy of London is declining, there may be problems attracting MNCs to locate their offices there. The key challenges in attracting investments to London are: 1) high personal and corporate taxes, 2) intrusive and inflexible labour policies that deter employers from hiring, 3) labour force that is ill prepared to meet the skills demanded by employers (not enough engineers, doctors etc).

Another issue with buying an apartment near the tube station is this: the tube tracks are often overland and they can be rather noisy. Here's a picture of an apartment located very near Stratford interchange. The place is Stratford Eye. The building is completed. The balcony overlooks 5 tracks. I wonder how noisy it will be with the trains screeching to a halt at the station nearby. The balcony could be an area to avoid if you want peace and quiet! If you buy an apartment there you could find it difficult to find good tenants who are willing to stay long.

We stayed in Copthorne near Kensington several months ago. The hotel was next to a train track, not even near a station. We could hear the faint noise of trains going past every few minutes even though the room was sound proofed and double glazed. 

There is a recent project launched by Telford Homes in Hong Kong, Singapore, Malaysia and the UK, called "Stratford Plaza". It is right next to the tube station and I can imagine the station will be extremely busy and noisy. I wonder if that's the reason they built a "winter garden" instead of a standard balcony. A winter garden is a balcony enclosed by sliding windows. Perhaps it is sound proofed so that occupiers won't be too bothered by the sound of screeching trains every few minutes.