What are the main reasons for investing in Shanghai rather than other cities?
Shanghai is a rapidly growing city, and isn't showing any signs of slowing down. If anything, the inward flow of people and capital, is increasing. And there is still a huge amount of catching up to do with comparable cities - such as Hong Kong, Singapore, Tokyo, London and New York; property prices in Shanghai are about a third of the level in London, and the average transaction is about a tenth of the value of New York. The Chinese want Shanghai to be the commercial and financial showcase for the whole of China, and it is already well on course to becoming a global city. There's no reason why property prices can't rise to the same level of other global cities over the next few years.

Can foreigners purchase property in China?
Foreigners and locals receive virtually equal treatment in housing purchase. All land in China is owned by the government by default, so what you're actually buying is a leasehold. New legislation has been introduced to protect residents' and investors' rights.

Is it possible to get mortgage finance?
There are plenty of banks in China (international and domestic) willing to lend money to foreigners, including some familiar names such as HSBC. Normally you need to put down a 30% deposit. Lending can be in local currency (Renminbi) or US Dollars. Rates are variable, capital repayment only (although they are starting to think about 'interest only'), and the term depends on the type of property and the age of the borrower. Similar checks and lending policy apply as in Western countries: identification and proof of residency, and proof of income.

Is it safe to own property in China? What are the risks?
It is safer to own property in China than ever before. New legislation protects the rights of private owners and investors. China is desperately keen to maintain the phenomenal growth that it has experienced over the last few years. This growth is largely domestic, but also thanks to the huge inflow of 'foreign direct investment', or FDI. The authorities know that if they do not look after investors' interests, a large part of which is respect of personal property rights, then the flow of FDI will dry up, and economic growth will be damaged. They have every incentive to look after foreign investors, as looking after your interest is very much in their interest.
One small but specific risk of buying from developers is the risk that the developer might go bust before completion of the project, and you end up losing your money. However, the authorities are tackling this by tightening up the rules on financing developers, so that they cannot 'over leverage' their operations. Oxford & Associates Shanghai only deal with developers who have a proven track record.
The other risks associated with owning property in China are no different to the risks associated with owning property anywhere: loss of tenants, unruly tenants, unforeseen maintenance requirements, etc. The best way to deal with these problems before they happen, is to buy the right property, appoint the right managing/letting agent, and find the right tenants. All part of the service that we offer.

How do you find tenants in Shanghai?
Same as you do in the UK/Ireland - you appoint a letting agent to find tenants for you. They market the property, show prospective tenants around your apartment, arrange the tenancy agreement, and deal with any problems while the tenant is actually in your property.

How do Tenancy Agreements work in Shanghai?
Tenants usually paid the landlords 2-months security deposit and 1-month rental in advance. Tenancy Agreements are very similar to Western countries.

How do I find and manage tenants from so far away?
Oxford & Associates offers property management services. We will handle the day to day administration and deal with any tenant issues.

Do I need to visit Shanghai to complete the purchase transaction?
There is no need to visit Shanghai to complete the purchase transaction, because the whole process can be managed remotely from our head office in Shanghai. But, if you do want to visit Shanghai to get involved with things more closely, then we can assist you with making the appropriate arrangements.
If you would like us to show you around Shanghai before you invest, in order to get a feel for the city, then we can arrange accompanied 'inspection visits' for individuals or small groups of investors.

What sort of rental income yield could I expect?
Typically between 6% and 10%, depending on the type of property and the location.

What about taxation?
An 'income tax' is charged at source on the rental income, and it is the managing agent's duty to make sure this is paid. If or when you sell your property, you will be subject to Chinese capital gains tax of 25% (20% if it was an owner-occupied property, plus 5% 'business tax' because it is let out).
Keep in mind property legislation rules change frequently in Shanghai and we will inform our clients of any changes.

Is it easy to sell property after I've bought it?
Yes, there is a liquid secondary market. It's a vast city, and there will always be buyers and sellers. The important thing is to buy a property that is likely to be popular with a good management company.

Can I get my money back out of China?
You have to be able to prove that you're only taking out money that you made resulting from your original investment. This is straightforward, as long as there is a clear audit trail of invoices, receipts, statements, etc. Oxford & Associates provides this service.
It is very likely that the rules on money flows will relax over time.

Is there any currency risk?
Yes, although it is our view that the risk is likely to be in investors' favour, rather than against them. China's local currency is the Renminbi, or RMB. The RMB is currently linked to the US Dollar, although there is increasing pressure for China to undo or move this link, as it is commonly held that the RMB is artificially undervalued. In fact, some experts are saying that a revaluation is likely in the not too distant future. If this happens, then investors with property in China will make a windfall gain on the currency, because the RMB, in which their property is denominated, will suddenly be worth more.