Properties in Panyu district, Guangzhou, China (Information Times)

May Lee now spends one-third of her time in Panyu - a city in Guangdong Province about two hours drive from Hong Kong - enjoying her retired life, and most importantly, keeping an eye on her property investments there.

Having retired from her retail business in Hong Kong for years, Lee bought her first mainland property in 2002. It was a four-room apartment in Clifford Estate - one of the sizable Hong Kong-managed estates in Panyu.

The purchase was simply driven by a desire to own a more comfortable and spacious living place that she could hardly afford in Hong Kong.

"I was visiting my friend there during the Halloween in 2002. The environment and atmosphere attracted me, causing me to miss the place I used to live in Canada. So I made up my mind to buy a house."

But Lee soon found mainland properties could be more than just homes. Many Hongkongers leased them as an investment.

"Some of my friends with mainland properties told me that the property market there was taking off. The rental yield was pretty handsome," she said.

Therefore, Lee purchased a couple of more flats in the next few years and leased them out for long-term investment.

"The entry is much lower than Hong Kong. A 1,000-square-foot flat in Clifford, for example, was only about HK0,000."

Describing herself as a "risk-conscious" person, she acknowledged that property leasing has generated steady and decent returns for her.

Lee also passed on this investment strategy to her daughter.

"I persuaded my daughter to purchase mainland properties for investment since she can hardly afford the pricey Hong Kong properties," Lee said.

A Clifford Estate spokeswoman put average rental returns at more than 7 percent. Monthly rent of a 1-million-yuan flat is about 6,500 yuan. She also said that more Hongkongers are buying their flats, accounting for two-thirds of the new transactions. (By By Hui Ching-hoo)