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    NEWS

    Rags to Riches to Nags: New Landlords Can’t Find Tenants

    Erstwhile farmers in Guangdong are finding that owning dozens of rental properties is more trouble than it’s worth.

    Villagers in Guangdong province, southern China, became — at least on paper — billion-yuan property magnates overnight after the rebuilding of their town. But despite their fortune, many continue to lead thrifty lives because they can’t find tenants.

    In 2011, a property developer started a renovation project to turn Dachong Village, near Shenzhen in Guangdong, into a commercial hub, adding office buildings, hotels, and residential compounds.

    Almost 400 families were asked to leave their homes and offered brand-new apartments as compensation, with the number of properties they received based on the amount of land and floor space they had previously owned.

    In April this year, new keys were handed over to the villagers, and as former farmers became landlords, the hunt was on for tenants.

    Not everyone has been successful, however. Screenshots circulated on social media show that a villager surnamed Ruan, the new owner of 66 apartments, recently filed an online complaint with the local government. The petition stated that the dearth of nearby office buildings has left her properties empty. She appealed to the district authority to build more office buildings and business centers in the area to ensure that there will be more potential tenants for the apartments she owns in a newly-constructed compound.

    The complaint has since been removed from the government’s website.

    Ruan wrote that she borrowed money from banks to equip all of her 66 apartments with the necessary appliances, but that as of early June, she had only managed to rent out five units. She said she was able to rent a 40-square-meter apartment for just over 2,000 yuan and a 50-square-meter apartment for less than 3,000 yuan. But as for her larger apartments, Ruan said she failed to rent out a single one of her two-bedroom, 60-square-meter apartments.

    Another villager told financial newspaper National Business Daily that she continues to work as a nursemaid and eats 20-yuan ($3) lunches out of habit, despite owning 100 brand-new apartments.

    However, it seems some in Dachong have had a bit more luck. Sixth Tone spoke with a man surnamed Zheng who was compensated with more than 100 apartments. Zheng said that of these, he’d already managed to rent out more than half, adding that he charged 3,400 yuan for a 40-square-meter room and at least 4,000 yuan for a 50-square-meter room.

    “Every day I would manage to rent out a few of my apartments,” Zheng said. “I signed one-year contracts with my tenants because I’m confident that a year from now, the rents will definitely have gone up.”

    Zheng even set up a booth near some office buildings close to his apartments to advertise his properties. His mobile number is displayed on a banner, and he says he cuts costs this way by avoiding the commission fees charged by real estate agents.

    Li Yetai, a property agent based in the area, told Sixth Tone that at least one-third of the thousands of new apartments have been rented out, and that in next two months the occupancy rate could surpass 90 percent.

    “It’s been less than two months since the property developer handed out keys to the owners,” Li said. “This is a prosperous area, given its location near the subway line. The supporting commercial infrastructure has been added, and businesses are gradually being brought in.”

    (Header image: High-rise apartment buildings under construction in Dachong Village, Shenzhen, May 8, 2015. Liang Xiashun/VCG)