Investment Property in Shanghai

Investment Real Estate in Shanghai

Shanghai 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 Shanghai.

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Search Map of Shanghai Investment Real Estate

Shanghai (Chinese: 上海, Shanghainese pronunciation [zɑ̃̀.hɛ́] (listen), Standard Mandarin pronunciation: [ʂâŋ.xài] (listen)) is one of the four direct-administered municipalities of the People’s Republic of China, governed by the State Council. The city is located on the southern estuary of the Yangtze River, with the Huangpu River flowing through it. With a population of 24.28 million as of 2019, it is the most populous urban area in China and the third most populous city proper in the world. Shanghai is a global center for finance, research, technology, manufacturing, and transportation, and the Port of Shanghai is the world’s busiest container port.

Originally a fishing village and market town, Shanghai grew its importance in the 19th century due to both domestic and foreign trade and its favorable port location. The city was one of five treaty ports forced open to European trade after the First Opium War, the Shanghai International Settlement and the French Concession were subsequently established. The city then flourished, becoming a primary commercial and financial hub of Asia in the 1930s. During the Second Sino-Japanese War, the city was the site of the major Battle of Shanghai. After the war, with the CPC takeover of mainland China in 1949, trade was limited to other socialist countries and the city’s global influence declined.

In the 1990s, economic reforms introduced by Deng Xiaoping a decade earlier resulted in an intense redevelopment of the city, especially the Pudong New Area, aiding the return of finance and foreign investment. The city has since re-emerged as a hub for international trade and finance; It is the home of the Shanghai Stock Exchange, one of the largest stock exchanges in the world by market capitalization and the Shanghai Free-Trade Zone the first free-trade zone in mainland China. As of 2020, Shanghai is classified as an Alpha+ (global first-tier) city by the Globalization and World Cities Research Network and ranked as having the 3rd most competitive and largest financial center in the world behind New York City and London. It has the second-highest number of billionaires of any city in the world, the fifth-largest scientific research output of any city in the world, and highly ranked educational institutions including four Project 985 universities: Fudan University, Shanghai Jiao Tong University, Tongji University, and East China Normal University.

Shanghai has been described as the “showpiece” of the booming economy of China. Featuring several architectural styles such as Art Deco and shikumen, the city is renowned for its Lujiazui skyline, museums and historic buildings including the City God Temple, Yu Garden, the China Pavilion and buildings along the Bund. Shanghai is also known for its sugary cuisine, distinctive local language and vibrant international flair.

As an important international city, Shanghai hosts numerous national and international events every year, such as Shanghai Fashion Week, the Chinese Grand Prix and ChinaJoy. In 2018, Shanghai hosted the first China International Import Expo (CIIE) the world’s first import-themed national-level expo.

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The financial stability of Shanghai 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 Shanghai

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

Whatever your goals with investment property in Shanghaiare – preparation is key.

Set goals based on how much rental yield will be required and the local rental yield rates in Shanghai and be prepared to change your initial outlook.
Thoroughly research the Shanghai location with a special emphasis on fringe areas outside the main Shanghai metropolis that may be valued lower than their better-known neighbours. Rental yields of around 5% are still attainable in certain areas of Shanghai.
Ensure that your target investment property in Shanghai 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 such as Physis Realty with local knowledge and experience of property legislation will give you the best chance of success.
You may think that managing your Shanghai properties yourself is an easy option, but are these savings justifiable when you run into Shanghai red tape? Physis Realty Shanghai office in downtown provides you with peace-of-mind and leaves you time to plan your next move in the growing Shanghai buy-to-rent sector.

With our expert guidance, investing in Shanghai provides the secure knowledge that your money is working harder than it would in a local Shanghai bank and that future generations of your family will be left with substantial capital growth assets.

We are always happy to advise on buying investment property in Shanghai, where we have been established for over 35+ years. Physis Realty has been a firm fixture in the Shanghai property market through good times and bad. Our experts have seen it all and our portfolios continue to outperform.

Flipping Investment Property in Shanghai

Flipping property in Shanghai

Flipping property is when we advise clients to buy a Shanghai 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 Shanghai market has a time to react to the renovation.

The Flipping Strategy in Shanghai

Investment property flipping in Shanghai 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 Shanghai real estate investments are sometimes referred to by professionals as ‘distressed’ Shanghai real estate.

What is distressed Shanghai property:

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

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

Calculate profit that you make from Shanghai investment property flipping:

Final Selling Price less Cost of Purchase less Costs = Profit

Here is an example:

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

Luxury Property in Shanghai

For luxury property investors hoping to add a superb property in {AsainCity} to their luxury real estate investment portfolio, Physis Realty is a trusted partner.

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A world leader in luxury real estate with a portfolio comprising some of the most sought-after real estate in Shanghai, Physis Realty caters particularly to high net-worth individuals and families in Asia. A luxury real estate investment in Shanghai should be entrusted to only the highest-quality agency.

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