‘Property tours’ in China: Free travel, no commitment required
October 6, 2013 Leave a comment
‘Property tours’ in China: Free travel, no commitment required
Staff Reporter
2013-10-05
“Excellent shops available, with down payment of 100,000 yuan (US$16,300) and a guaranteed lease period of 15 years at an annual return rate of between 8%-18%. Free transportation and accommodation will be provided to those who wish to see the shops over the National Day holiday.” The above advertisement has proved attractive for potential buyers keen to take advantage of getting a free trip with no commitment to buy anything required.A woman surnamed Zhang from Jiaxing in Zhejiang province recently took such a tour to Fuzhou in neighboring Fujian to view the advertised property. Her round-trip train tickets were provided by a realty agency in the city.
The agency said it had made similar arrangements for several groups each comprising hundreds of people from Zhejiang during the weeklong National Day holidays which began on Oct. 1.
Asked why they do not target local patrons instead of soliciting potential buyers from afar if the rate of return is as high as they claim, the agencies in charge of the properties said they wanted to expand their pool of buyers and sell the shops as soon as possible.
However, if the number of people viewing these properties is large but only a few make a commitment, how do the agencies make any money?
One agency said the cost of paying for each visitor falls within the hundreds of yuan, but if a deal is clinched the agency can receive tens of thousands of yuan as a commission.
The shops promoted by such realty agencies are often small, low-priced and are located some distance from the downtown area, so local people are usually not interested in them.
Potential buyers from other provinces are often promised high rents as an incentive to buy them.
However, an expert in the property sector has advised buyers to watch out for potential risks as they could suffer huge losses over the long term, even if they make small profits at first.
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