Investment Property in Shenzhen

Investment Real Estate in Shenzhen

Investment Property in Shenzhen
Investment Property in Shenzhen

Shenzhen property investment can be a worthwhile venture if you are selective with the areas you choose to invest in. If not, you could find that your investment suffers due to low rental yields, dwindling demand, and slow property price growth in many parts of Shenzhen.

Search Map of Shenzhen Investment Real Estate

Shenzhen (; /ʃɛnˈʒɛn/; Chinese: 深圳; pinyin: Shēnzhèn; Mandarin pronunciation: [ʂə́n.ʈʂə̂n] (listen)), also historically known as Sham Chun, is a major sub-provincial city and one of the special economic zones of China. The city is located on the east bank of the Pearl River estuary on the central coast of southern province of Guangdong, bordering Hong Kong to the south, Dongguan to the north, and Huizhou to the northeast. With a population of 17.56 million as of 2020, Shenzhen is the third most populous city by urban population in China after Shanghai and Beijing. Shenzhen is a global center in technology, research, manufacturing, business and economics, finance, tourism and transportation, and the Port of Shenzhen is the world’s fourth busiest container port. Shenzhen is classified as a Large-Port Megacity, the largest type of port-city in the world.

Shenzhen roughly follows the administrative boundaries of Bao’an County, which was established since imperial times. The southern portion of Bao’an County was seized by the British after the Opium Wars and became Hong Kong, while the village of Shenzhen was situated on the border. Due to the completion of a train station that was the last stop on the Mainland Chinese section of the railway between Guangzhou and Kowloon, Shenzhen’s economy grew and became a market town and later a city by 1979, absorbing Bao’an County for the next decade.

In the early 1980s, economic reforms introduced by Deng Xiaoping resulted in the city becoming the first special economic zone of China due to its close proximity to Hong Kong, attracting foreign direct investment and migrants searching for opportunities. In thirty years, the city’s economy and population boomed and has since emerged as a hub for technology, international trade, and finance. It is the home to the Shenzhen Stock Exchange, one of the largest stock exchanges in the world by market capitalization and the Guangdong Free-Trade Zone. Shenzhen is ranked as an Alpha- (global first-tier) city by the Globalization and World Cities Research Network. Its nominal GDP has surpassed neighboring cities of Guangzhou and Hong Kong and is now among the top ten cities with the largest economies in the world. Shenzhen also has the eighth most competitive and largest financial center in the world, the eighth-most Fortune Global 500 headquarters of any city in the world, fifth-highest number of billionaires of any city in the world, the second largest number of skyscrapers of any city in the world, the 28th largest scientific research output of any city in the world, and several notable educational institutions, such as Shenzhen University, Southern University of Science and Technology, and Shenzhen Technology University.

Due to the city being a leading global technology hub, Shenzhen has been dubbed by media China’s Silicon Valley. The city’s entrepreneurial, innovative, and competitive-based culture has resulted in the city being home to numerous small-time manufacturers or software companies. Several of these firms became large technology corporations such as phone manufacturer Huawei, holding company Tencent, and drone-maker DJI. As an important international city, Shenzhen hosts numerous national and international events every year, such as the 2011 Summer Universiade and the China Hi-Tech Fair [zh]. Shenzhen’s rapid success has resulted in the Chinese government turning Shenzhen into a model city for other cities in China to follow.

Get Our Latest List of Investment Property in Shenzhen

The financial stability of Shenzhen has translated into a real estate market that rewards forward planning and a willingness to look beyond areas of traditional affluence.

 

Buy to Rent in Shenzhen

 

Renting out your Shenzhen buy-to-rent investment property can grow wealth and income.

 

Whatever your goals with investment property in Shenzhenare – preparation is key:

 

  • Set goals based on how much rental yield will be required and the local rental yield rates in Shenzhen and be prepared to change your initial outlook.
  • Thoroughly research the Shenzhen location with a special emphasis on fringe areas outside the main Shenzhen metropolis that may be valued lower than their better-known neighbours. Rental yields of around 5% are still attainable in certain areas of Shenzhen.
  • Ensure that your target investment property in Shenzhen appeals to professionals. This is a demographic that ensures maximum income and low voids.
  • Finding and vetting suitable tenants is a job ideally left to the professionals. Working with an established letting agent with local knowledge and experience of property legislation will give you the best chance of success.

Flipping Investment Property in Shenzhen

Flipping property in Shenzhen

 

Flipping property is when we advise clients to buy a Shenzhen property below market value, renovate it and then make a profit by selling it at a higher price, all within a few months, and often before the Shenzhen market has a time to react to the renovation.

 

The Flipping Strategy in Shenzhen

 

Investment property flipping in Shenzhen is a simple strategy. You find a property that is in need of renovation from our list and purchase it for a low price. These type of Shenzhen real estate investments are sometimes referred to by professionals as ‘distressed’ Shenzhen real estate.

 

What is distressed Shenzhen property:

 

  • Shenzhen property in need of renovation
  • Shenzhen real estate with a change of puropose and use
  • Oversold Shenzhen property
  • Bank repossessions in Shenzhen

 

Put simply, long term investors in Shenzhen purchase the property, renovate it and make it a lot more attractive to potential buyers.

 

Calculate profit that you make from Shenzhen investment property flipping:

 

Final Selling Price less Cost of Purchase less Costs = Profit

Here is an example:

Shenzhen property purchase price: $220,000

Renovation costs: $20,000

Other costs: $25,000

Property sale price: $400,000

Profit: $135,000

 

Experienced property developers in Shenzhen use a minimum profit value of 22% when looking at potential Shenzhen projects. The reason for this is because there are lots that can go wrong in Shenzhen property flipping and working on a potential margin of 22% should still leave a good margin of error.

 

Property Secured Investments is a Private Equity fund that invests in Shenzhen and many other towns and cities across Europe. The fund is only available to Sophisticated Investors and closed to United States Citizens. While this is not an offer or promotion of the fund, more information can be found at the website

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