Date: 15 April 2020

Recently, I received this property deal from an agent selling Vietnam property. Having experience with exaggerating and over-optimistic agents, I will not listen to anything they said except the name of the project and the price.

I like filters because it is very efficient in narrowing down your options so that you will not waste time on digging into something not worth it.

For property deals, here is my current filters:

  1. Rental Yield greater than comparable Reits
  2. The quoted price is similar to the recent selling price of comparable units
  3. Positive cash flow after mortgage repayment if any
  4. Valuation of the property is higher than the quoted price

Opportunity cost is a great filter because anything worse than your next best option can be filtered. That’s why I used Reits in my first filter. By doing nothing, I can get a certain percentage of return, why I need to put extra effort if it is worse than my “do nothing” option? This concept can be expanded to basically any decision, for example, why investing in property instead of stocks?

After applying the filters, I will look at the qualitative factors of the property if it passed.

Filter 1:

Quoted Price per m2 in HKD: 16,200
Median Rental per m2 in HKD: 46
Yield: 3.4%
Link Reit Dividend Yield Today: 3.94%

Clearly, this is a NO for me. The rental yield is too low. I am better off by just investing in boring Link Reit and get 3.94%. You may argue dividend is not guaranteed. Yes, but so is rental income. By investing in Reit, I got more liquidity and less management headache.

Actually, there is no need for me to look further. But doing filter #2 is easy. So, I have also done it.

Filter 2:

Quoted Price per m2 in HKD: 16,200
Median Price per m2 in HKD: 12,128

No for me. A 33.5% difference. Even I assumed the 10% VAT is not included in the Median Price, there is still a 21% difference.

How to get data?

Although I wrote a lot of Python to scrape data, sometimes there is easier option. It is all about efficiency. Why write your own, if something works out of the box? I used Instant Data Scarper, a plugin for Google Chrome.

Usually, the property listings are in table format. This is perfect for auto scrappers if you are just looking for a few pages of data. (It won’t work for large amount of scrapping since it is slow and will be blocked)

After I get the data in a table format, I just use Google Sheets to analyze the data.

P.S.: Sometimes, price and unit mixed in the same column. You need to use some tricks (my favorite is Regex) to separate them.

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