Soaring rents in Hong Kong pose a big headache for locals who can’t afford to acquire their own homes. Meanwhile, mainland students in Hong Kong also find it hard to rent a place in view of the limited number of dorms and hostels in the city.
Lam Chun-ming, a junior engineering student at the Hong Kong University of Science and Technology, saw a business opportunity in the situation.
With two classmates, Lam set up Hoome.hk—a website which sublets apartments to mainland students. Business has been quite encouraging so far.
The website has leased out around 30 apartments in just two weeks after the summer vacation started, accounting for 80 percent of the total apartments available. Monthly rents are between HK$2,000 and HK$6,000.
For these gang piao (港漂，literally “floating to Hong Kong”, a term that refers to mainlanders who come to the city to work or study), renting a room or even a bedspace from the website is more affordable than a subdivided flat.
Hoome.hk also provides basic home appliance maintenance for its tenants for HK$90 per month, the Hong Kong Economic Journal quoted Lam as saying. Free cleaning services are offered every two weeks.
Currently, there are around 80 to 90 non-local students renting rooms from Hoome.hk. Lam said return on investment could reach 10 percent for the whole project.
The whole idea popped up last year. Lam subleased three apartments on a trial basis and achieved promising results. This year, Hoome.com has expanded by joining hands with mainland property agency Qfang.com.
Lam cites the Festival City in Tai Wai as an example. A four-room apartment in the estate, about 1,300 square feet in size, is sublet to six non-local students. The rents paid by the students ranged from HK$3,000 to HK$5,900, according to the size and view of the room, Lam told Oriental Daily.
Renting an entire apartment of this size would cost around HK$26,000, but combined income from subletting the unit reaches HK$28,000 per month. That’s a 7.7 percent yield from the investment.
Qfang acts as a rental consultant for Hoome.hk. Qfang director Chen Kunxing, said all the landlords who join the program knew that their properties would be sublet to others.
Normally, it is an illegal act to sublet properties in Hong Kong. Tenancy document usually contains a clause that prohibits the tenant from subletting the property to another party.
Any subletting by the tenant will be a breach of such a clause and the landlord can institute legal action for compensation.
It is surely not a business that anyone could do. However, Lam’s idea of setting up the subletting platform has gained approval from the university.
The university even invites investors to inject capital into the program, thus bolstering its operation.
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