Date
18 December 2017
Not too many people would want to invest in a haunted house, but those who did might realize that it's not such a bad idea after all. Illustration: Wikimedia
Not too many people would want to invest in a haunted house, but those who did might realize that it's not such a bad idea after all. Illustration: Wikimedia

There’s money to be made in a haunted house

For most practical Hongkongers who are thinking of buying a home, nothing is scarier than a surge in property prices.

So on the eve of the Hungry Ghost Festival, the Chinese Halloween, allow us to relate to you, our dear readers, a sort of a ghost story involving a haunted house transaction in the city.

In 1996, there lived a family of five in a nondescript apartment at Tai Yuen House in Tsuen Wan. Business turned sour, and the owner decided to rent out a portion of the flat to two tenants.

That might have helped the family a little, but unpaid bills kept mounting. The man of the house took his situation a bit too hard and one night, he killed his wife, three children and the two tenants with poison and gas.

He also tried to kill himself but survived. He was rescued but placed in a psychiatric institution.

The urban tragedy has inspired a number of horror flickers and ghost stories, and the house itself has been shunned by estate agents and flat hunters.

The Chinese are quite sensitive about living in places linked to unusual deaths. In fact, many of them would not want to die at home as much as possible because they would not want the value of their property to go down.

Still, the house at Tai Yuen House has changed ownership eight times since the horrific incident took place.

The latest owner is an enterprising foreigner who believes that there is nothing to fear but fear itself. He bought the 374 square foot property in May for HK$2.08 million, or about half of its current market price of more than HK$4 million.

The previous owner is a local resident, a Roman Catholic, who apparently doesn’t believe or is not scared of ghosts. He bought the unit in December 2015 for HK$1.55 million, and immediately leased it to a firefighter for a monthly rent of HK$7,000.

So aside from his rental earnings, in a matter of 18 months, the owner made a clean net of nearly HK$300,000 from the sale, after paying a special stamp duty of 10 percent because he flipped the unit within two years.

He had bought the flat from Chan Ying-kai, a property investor known for amassing smart profits from investing in haunted houses.

Chan, for his part, had reportedly earned HK$400,000 because he had bought it for only HK$1.18 million in 2011.

If there is any financial lesson to be learned from this Chinese Halloween story, it is that there must be nothing worse than living or investing in a haunted house except having no flat at all.

And, of course, there is profit to be made in the most undesirable situation.

– Contact us at [email protected]

CG

EJ Insight writer

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