EJ InsightToday, 15:07
There is no such thing as a free lunch in Hong Kong, but if you pay a fee, you can get almost anywhere – including to your own property.
Several local papers carried a little story about a certain Tuen Mun tenant who got a rebate of HK$500 from his landlord every time he opened the door for potential buyers of the flat.
The tenant reportedly opened the door of the flat 11 times in 10 days and got a rebate of about half his monthly rental from the landlord who was quite anxious to dispose of the property.
Now why would a landlord, who jacks up the rent to an unconscionable level everytime the lease contract is up for renewal, exhibit such generosity to the tenant?
Well, it’s the sign of the times, when no less than the ever-optimistic Li Ka-shing bemoans that the economy this year will be the worst in 20 years.
And if you want your property sold in such an environment, be generous to everyone who can help you make it happen.
Take the case of a landlord in Tseung Kwan O who managed to sell his flat within five days after offering the “open door” fee.
One gets quicker results by being generous, you know.
OK, HK$500 is not a big number, but it’s good enough for a buffet dinner. And 10 times that you can have a brand-new iPhone.
But for those who consider moving residence such a hassle, all they have to do is mess up the flat and whisper to the prospective buyer about the clogged drainage and the neighbor’s ferocious Rottweiler or any other bad comments about the flat.
That way, they get to stay in the flat a bit longer and collect the “open door” fee as well.
But seriously, the “open door” fee is a fair, win-win system. The landlord has to pay because the tenant is under no obligation to entertain a prospective buyer even for just a short 10-minute visit, which often comes at the oddest hour.
Giving money is a proven, effective incentive as it is what makes the world – Hong Kong, in particular – go round, especially at a time of poor property market sentiment.
Last month, a Yuen Long residential project called Spectre – not related to James Bond but to developers K Wah and Sino Land – offered HK$500 supermarket coupons to agents who brought customers to their show flats and submitted signed cheques.
Unfortunately, the gimmick did not work well. The duo were only able to sell less than 40 percent of the initial launch right after Li Ka-shing gave his bleak forecast about the Hong Kong economy.
Anyway, developers have to think up all sorts of gimmicks to sell their properties, especially if they happen to be a small and remote project.
In good times, they could sell flats even without advertising, but these days they have to go the extra mile to come up with the right pitch.
I remember quite well in the days of SARS, a certain developer gave reporters a taste of the ritzy lifestyle to advertise a luxury project.
French food, cruise ship and fine arts are not really my cup of tea but I got to live the life of a rich man for two days in my life.
The first batch of units was priced as low as HK$4,000 per square foot – clearly a wrong price – and they were all sold out.
The second batch was launched at almost double the price the following year without a single ad.
The flats are now four times their original price.
All these marketing gimmicks do help you distinguish a buyer’s market from a seller’s market.
– Contact us at english@hkej.com
BK/JP/CG
http://www.ejinsight.com/20160407-why-the-landlord-pays-you-hk500-every-time-you-open-the-door/?utm_source=rss&utm_medium=rss&utm_campaign=20160407-why-the-landlord-pays-you-hk500-every-time-you-open-the-door
