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Selling at a perfect timing is key factor for a profitable investment


Damon Ho

9th September 2023

In property investment, it is crucial for a profitable deal not only to focus on buying at the lowest price but to focus on seizing the opportunity to sell at a higher price before the price drop. Selling at a perfect timing, it can generate huge profits, even if the initial purchase price was slightly higher. 

The borders between China and Hong Kong were reopened at the beginning of this year. At that crucial moment, the author's friends asked me if they should sell their residential units in China which had been vacant for five years. The author stated if they believed the property market had already peaked, they should sell as soon as possible. Personally, the author believed that China property market had already reached its peak. 

One of them following the author's advice, he immediately returned to China to sell his property. At the beginning of the border reopening, the public anticipated a great rebound soon. After my friend's listing was exposed to the public, it drew a lot of domestic property buyers to inspect his property and received several counteroffers soon. Consequently, he sold his property at a favorable price before the end of April and successfully remitted the funds back to Hong Kong. 

The other friend of the author believed that the property market would continue to rebound. As a result, this friend has been holding his unit. However, the asking price of this similar premises had dropped by 20%, and transaction volumes remained low. Even if he is willing to sell his premises at a reduced price now, it is still challenging to locate potential buyers. Moreover, even if the deal was sealed, the proceeds have no way to remit back to Hong Kong. 

These two friends mentioned above purchased individual units of the same quality and size in the same housing estate around 12 years ago. The transaction price was approximately Hk$ one million each. One friend had sold his premises for four million, while the other friend has reduced the asking price HK$ 1 million to put on sale his unit, but his listing still got no attention. It is still difficult to predict how much he should reduce the asking price so that he can close a deal. Even this friend can make a deal, the price reduction plus the exchange rate reduction of the proceeds, the total loss is two million.

The example above illustrates that timing of a deal is a crucial factor in determining the profitability of an investment. Some individuals speculate that the government's measures can save the market, the domestic property market may resume its upward trend. The author does not have a clue to make sure if these speculators can accurately estimate the market trend and maximize the profit at higher price at the end. If they have such superb capability, they deserve to make a great profit for their investment. 

In summary, in property investment, it is essential to assess the market situation and seize the opportunity to sell at an advantageous time to maximize profits. 

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