Saturday, December 30, 2006
Not such a good idea investing in Spain?
I just read in the UK magazine 'Homes Abroad' that investment in Spain may not be such a good idea with some saying a property crash is due in the near future. It did go on to say that if the property is in the right location in Spain then it could still be a sound investment. One reason for the potential crash is due the competition from other areas of Europe offering holidays in the sun. It shook my confidence for an hour or so but on the whole I am happy with my decision to buy in Tres Molinos. The property I've secured is in an area that is not over populated and there is significant investment in the resort so I'll stay calm... for now :o)
Wednesday, December 27, 2006
Property Investment in the United States
The United States has been the Promised Land, the land of opportunity and the home of the Big American Dream all rolled into one for so long, that property prices in the major metropolitan cities of this country have been hitting highs during 2006. But the USA is so huge, with so many great urban centers, great small towns and open spaces that there is no dearth of land for any investor, small or big. It is the world’s largest economy at $13 trillion, supporting 300 million people over a land area of almost 10 million square kilometers, the third largest in the world. Everything is big here, and there is plenty of room for everyone. A consumption economy, as it has been called, the USA is one of the largest markets for goods and services in the world.
The property market in America had hit a record for the fifth year in a row in 2005, says the National Association of Realtors (NAR) and 2006 has also been a good sales year for them. The market has been firm and the prices have come off the high of the previous year but remained at a solid level, making for a realistic and balanced scenario. Language and the affordability of transatlantic travel make the USA a popular European overseas investment property market.
The highest priced real estate is said to be in San Francisco, and Texas is touted as the best place to live. The NAR named Florida the market with the fastest appreciation in the US, with the upcoming locations seeing a price rise of up to 40% in the year 2005. The perfect weather has something to do with it, and so do the sunny beaches. Miami offers some gorgeous beaches, sensational nightlife and glamorous neighborhoods that are home to A-list Hollywood stars. In fact, Miami, Orlando and Fort Lauderdale are amongst the popular real estate investment properties in the US due to heavy tourist traffic from all over the world creating a demand for rental accommodation. Orlando is home to Disney World, a huge tourist attraction.
Spacious Florida homes typically come in full villa style, with open air pools and beautiful views of the ocean. This brings in a lot of holiday home seekers, and the competitive prices attract home buyers and investors alike. In comparison to Europe or even other places in the US, Florida offers affordable real estate and a chance for capital appreciation in the right locations. For Europeans, the favorable dollar conversion rate also adds to the charm of purchasing a house in the US.
Las Vegas is also a much talked about area right now, with capital appreciation seeing growth numbers of 30% year on year at some locations. Further, New York and New Jersey are also seeing good demand, though prices are not escalating like the rest of the country. For low prices and low returns, the country living in the American Midwest can offer you a fairly good-sized house for as little as $100,000. Farm houses with plenty of land and structures attached are also available at great low prices here.
Holiday homes are best purchased along the West and East coasts (Florida, California, near New York or Washington DC, the Hamptons etc.) and at the ski resorts in the Rockies (Colorado, etc) and glamorous destinations like Las Vegas.
The property market in America had hit a record for the fifth year in a row in 2005, says the National Association of Realtors (NAR) and 2006 has also been a good sales year for them. The market has been firm and the prices have come off the high of the previous year but remained at a solid level, making for a realistic and balanced scenario. Language and the affordability of transatlantic travel make the USA a popular European overseas investment property market.
The highest priced real estate is said to be in San Francisco, and Texas is touted as the best place to live. The NAR named Florida the market with the fastest appreciation in the US, with the upcoming locations seeing a price rise of up to 40% in the year 2005. The perfect weather has something to do with it, and so do the sunny beaches. Miami offers some gorgeous beaches, sensational nightlife and glamorous neighborhoods that are home to A-list Hollywood stars. In fact, Miami, Orlando and Fort Lauderdale are amongst the popular real estate investment properties in the US due to heavy tourist traffic from all over the world creating a demand for rental accommodation. Orlando is home to Disney World, a huge tourist attraction.
Spacious Florida homes typically come in full villa style, with open air pools and beautiful views of the ocean. This brings in a lot of holiday home seekers, and the competitive prices attract home buyers and investors alike. In comparison to Europe or even other places in the US, Florida offers affordable real estate and a chance for capital appreciation in the right locations. For Europeans, the favorable dollar conversion rate also adds to the charm of purchasing a house in the US.
Las Vegas is also a much talked about area right now, with capital appreciation seeing growth numbers of 30% year on year at some locations. Further, New York and New Jersey are also seeing good demand, though prices are not escalating like the rest of the country. For low prices and low returns, the country living in the American Midwest can offer you a fairly good-sized house for as little as $100,000. Farm houses with plenty of land and structures attached are also available at great low prices here.
Holiday homes are best purchased along the West and East coasts (Florida, California, near New York or Washington DC, the Hamptons etc.) and at the ski resorts in the Rockies (Colorado, etc) and glamorous destinations like Las Vegas.
Tuesday, December 26, 2006
Property Investment in Bulgaria
Bulgaria is a country full of ancient history and culture. One of the oldest European countries, it is now home to nine UNESCO World Heritage sites. It is located on the verge of the Black Sea, in Southeast Europe, surrounded by Greece, Serbia, Macedonia and Romania. A center of many ancient empires, the country turned Communist after the Second World War. While repressing the economy, this served to preserve the culture and heritage of this land of kings and tsars. More recently, since the 1970s, Bulgaria has sought to build relations with its neighbors, move towards a democratic system of government and liberalize the economy.
The topography of the country varies widely, from alpine mountains in the southwest to the warm Mediterranean beaches along the Black Sea. The famed Balkan mountain range slices through Bulgaria from West to East, and the legendary Danube river flows in the North. Sofia is the center of economic and political activity in its capacity as the capital of Bulgaria. The country supports a population of 7.7 million, over a land area of over 40,000 square miles.
The GDP growth rate of the country remains around 5% in the last couple of years and EU membership is expected in 2007. Both factors have been impacting the overall economy and contributing to the stability of property prices. Additionally, Bulgaria became a NATO member country in 2004. Proximity to Europe, Asia and Africa makes the country a crossroads in inter-region travel, with 5 of the 10 trans-European connections cutting through Bulgaria. Air and land transport is well developed, with ample international airports and plenty of public transport facilities in large and small towns. Bulgaria is one of the countries of East Europe to which companies are attracted due to highly qualified workforce and reduced overhead costs, particularly in the area of science and technology.
Bulgaria is experiencing strong growth at an early stage in its development, making it a promising destination for those seeking a substantial capital appreciation in overseas investment property. There has also been a huge surge in the number of tourists, over 50% in 4 years, with the majority of the increase from European countries. Great spas, modern infrastructure and a stable political environment all add up to a great holiday destination. Meanwhile, the prices for property remain low, giving opportunities for long term investment property pension.
All these indicators explain the rising property values in the country, as well as the hype surrounding overseas investment property in Bulgaria. However, there are some areas for concern in this emerging market. Corruption has been a major issue that effects the economic growth, and coupled with the recession of the 1990s, has caused the emigration of millions of Bulgarians from their country. Further, a major concern for those seeking buy to let properties is that the population of the country is actually declining, and Bulgaria holds the dubious distinction of being the country with the world’s slowest population growth rate. The market for rented property is fragmented and there is a lack of quality accommodation.
Overall, when investing in Bulgaria, the selection of the location and the property is critical. Despite the hype surrounding the coasts, the yields are low and the property is difficult to sell. Sofia is considered to be the center for growth, particularly the new off plan investment property. Yields on this real estate are good at around 5%. Select ski resorts are also regarded by analysts as possible candidates for capital appreciation, though the returns are seasonal and the property must be carefully chosen.
The topography of the country varies widely, from alpine mountains in the southwest to the warm Mediterranean beaches along the Black Sea. The famed Balkan mountain range slices through Bulgaria from West to East, and the legendary Danube river flows in the North. Sofia is the center of economic and political activity in its capacity as the capital of Bulgaria. The country supports a population of 7.7 million, over a land area of over 40,000 square miles.
The GDP growth rate of the country remains around 5% in the last couple of years and EU membership is expected in 2007. Both factors have been impacting the overall economy and contributing to the stability of property prices. Additionally, Bulgaria became a NATO member country in 2004. Proximity to Europe, Asia and Africa makes the country a crossroads in inter-region travel, with 5 of the 10 trans-European connections cutting through Bulgaria. Air and land transport is well developed, with ample international airports and plenty of public transport facilities in large and small towns. Bulgaria is one of the countries of East Europe to which companies are attracted due to highly qualified workforce and reduced overhead costs, particularly in the area of science and technology.
Bulgaria is experiencing strong growth at an early stage in its development, making it a promising destination for those seeking a substantial capital appreciation in overseas investment property. There has also been a huge surge in the number of tourists, over 50% in 4 years, with the majority of the increase from European countries. Great spas, modern infrastructure and a stable political environment all add up to a great holiday destination. Meanwhile, the prices for property remain low, giving opportunities for long term investment property pension.
All these indicators explain the rising property values in the country, as well as the hype surrounding overseas investment property in Bulgaria. However, there are some areas for concern in this emerging market. Corruption has been a major issue that effects the economic growth, and coupled with the recession of the 1990s, has caused the emigration of millions of Bulgarians from their country. Further, a major concern for those seeking buy to let properties is that the population of the country is actually declining, and Bulgaria holds the dubious distinction of being the country with the world’s slowest population growth rate. The market for rented property is fragmented and there is a lack of quality accommodation.
Overall, when investing in Bulgaria, the selection of the location and the property is critical. Despite the hype surrounding the coasts, the yields are low and the property is difficult to sell. Sofia is considered to be the center for growth, particularly the new off plan investment property. Yields on this real estate are good at around 5%. Select ski resorts are also regarded by analysts as possible candidates for capital appreciation, though the returns are seasonal and the property must be carefully chosen.
Monday, December 25, 2006
Property Investment in France
France is the country of romance for some – the Eiffel Tower, the Champs Elysees, little sidewalk cafes, the sensuous language and the delicious food. A sense of surrealism still surrounds the country – with its glamorous cities that rank amongst the world’s fashion capitals, and its rustic charming countryside. One of the most popular tourist destinations in the world, France attracts over 70 million tourists annually. With its chateaux, vineyards, farms, apartments, beach houses and other types of property, there is a home for everyone in France. It is regarded as a great country to visit at least once in your lifetime and has a number of large urban centers and smaller towns that remain popular with tourists and would-be residents alike.
France is not the place to invest lightly – the current prices require a serious amount of money for any good property investment. As the prices in cities have risen, the demand for real estate in the interior and in small towns has increased, causing prices to rise across the board. It will be hard to find any undiscovered gems in this saturated market, but it is still possible. The strength of the Pound relative to the Euro is one reason that experts predict continued demand from the British for both buy to let and off plan purchases. The prices have recently seen a high but are expected to stabilize in 2007, say experts and agents.
On a positive note for the potential investor, there has been growing concern that people have pulled their money out of capitalized markets to invest in emerging markets across Eastern Europe and other areas, which has led to some easing in the overpriced French market. Younger investors have been buying off plan investment properties, so these developments have seen some demand. Further, those seeking buy to let properties for supplementing a pension scheme will find the returns come sooner than those in an emerging market.
France has a well developed legal system that works, as opposed to some developing countries. This provides the buyer with a great sense of security in the processing phase and during all the formalities. Further, the strength of the domestic market means that buyers are assured of being able to sell out as and when they please. The anticipated correction in prices in 2007 is expected to bring good demand and renewed interest in the French property market over the course of the year.
Additionally, the situation varies depending on the area within France. The legendary, wealthy south of France has seen strong demand and stable prices that are expected to continue. Agents claim that buy to let properties are gaining popularity amongst buyers of new real estate. In Provence, Lot and Aude, prices have risen recently, and Languedoc is being touted as the next big thing. Quercy has seen increased interest in older property, particularly property development opportunities.
A number of people seek older homes suitable for property development in France and there is a sizeable stock of such places. It is important to remember that property can not give you guaranteed returns, no matter what the agents tell you. Larger cities are more appropriate for buy to let properties due to a better developed rental market in these areas. With the heavy demand for high quality rentals, a carefully selected property can still yield over 6% on top of capital appreciation. This is ideal if you are looking for investment property pension in the shorter term.
France is not the place to invest lightly – the current prices require a serious amount of money for any good property investment. As the prices in cities have risen, the demand for real estate in the interior and in small towns has increased, causing prices to rise across the board. It will be hard to find any undiscovered gems in this saturated market, but it is still possible. The strength of the Pound relative to the Euro is one reason that experts predict continued demand from the British for both buy to let and off plan purchases. The prices have recently seen a high but are expected to stabilize in 2007, say experts and agents.
On a positive note for the potential investor, there has been growing concern that people have pulled their money out of capitalized markets to invest in emerging markets across Eastern Europe and other areas, which has led to some easing in the overpriced French market. Younger investors have been buying off plan investment properties, so these developments have seen some demand. Further, those seeking buy to let properties for supplementing a pension scheme will find the returns come sooner than those in an emerging market.
France has a well developed legal system that works, as opposed to some developing countries. This provides the buyer with a great sense of security in the processing phase and during all the formalities. Further, the strength of the domestic market means that buyers are assured of being able to sell out as and when they please. The anticipated correction in prices in 2007 is expected to bring good demand and renewed interest in the French property market over the course of the year.
Additionally, the situation varies depending on the area within France. The legendary, wealthy south of France has seen strong demand and stable prices that are expected to continue. Agents claim that buy to let properties are gaining popularity amongst buyers of new real estate. In Provence, Lot and Aude, prices have risen recently, and Languedoc is being touted as the next big thing. Quercy has seen increased interest in older property, particularly property development opportunities.
A number of people seek older homes suitable for property development in France and there is a sizeable stock of such places. It is important to remember that property can not give you guaranteed returns, no matter what the agents tell you. Larger cities are more appropriate for buy to let properties due to a better developed rental market in these areas. With the heavy demand for high quality rentals, a carefully selected property can still yield over 6% on top of capital appreciation. This is ideal if you are looking for investment property pension in the shorter term.
Sunday, December 24, 2006
Property Investment in Poland
Poland is the largest of the ten countries to join the European Union (EU) in 2004. It is located in the very heart of Europe. A large country, with a population of just under forty million, Poland sees a concentration of its people living in and around the capital city of Warsaw and the major city of Krakow. Two other cities are at the forefront of development, Lodz, home to a prestigious international film festival, and Wroclaw, a stunning ancient city that continues to thrive. There is plenty of skiing in Poland as well, with regions such as Kaprun that offer a long season and ideal weather conditions.
Analysts claim that Warsaw’s population may double in the next 4 to 5 years. There is a low rate of unemployment and the growth indicators for the country remain strong. The low tax structure and political stability adds to Poland’s overall strengths as a destination for overseas investment. Property in Poland is owned by right of freehold or absolute ownership. The economy is largely dependent on income from exports and has seen liberalization in recent years. Poland is ranked amongst the new member nations of the EU that may soon achieve alignment with the economic standards set by the EU to join the Euro zone. This is already impacting the property prices in the country, and these are rising. Another reason for the rise in prices is access to EU aid that serves to create infrastructure development and boost the economic growth of Poland.
Rents are rising as well, largely due to: an influx of employers from the West, looking for low-cost, educated work force and reduced overhead expenses. Increased numbers of expatriates in the country are also creating a demand for high quality residential real estate. Furthermore, data suggests that the bulk of East Europeans prefer to live as tenants as opposed to owners - a major social and cultural factor to consider if you wish to ‘buy to let’.
Average rental yields are estimated to be a healthy 5%, and many people see major possibilities in off plan investment properties. While there are all levels of housing available, the safest bet may be the mid market price range options. These are likely to see the most appreciation, particularly if held for the long term. While it may seem risky to invest in an emerging market that you may know little about, consider that the returns on your capital also have the potential to be large. The capitalized western markets offer very low growth; even countries like Spain have seen most of their growth already. Eastern Europe is regarded as the next big thing by a number of investors looking to double their money.
Further incentives are provided by Polish rules that provide a capital gains tax holiday and freedom from value added tax (VAT) for properties that are sold after a five year period. The country has focused on reducing the limitations and paperwork surrounding overseas investment property for foreign nationals. Several billion dollars will be invested in the Polish real estate market over the next few years, and this is sure to create pressure on the prices. Exciting new developments are coming up in Warsaw and other historic cities such as Wroclaw offer opportunities from property development and resale.
However, a final word of caution: Poland has its share of con artists like any other country, so select your lawyer and agent carefully. One possibility is to get your local agency to handle the deal for you, so find out whether they deal in overseas investment property. You will need a local lawyer as well so ask others who have bought real estate, particularly buy to let property in Poland. As with any major investment – do your research and get good advice!
Analysts claim that Warsaw’s population may double in the next 4 to 5 years. There is a low rate of unemployment and the growth indicators for the country remain strong. The low tax structure and political stability adds to Poland’s overall strengths as a destination for overseas investment. Property in Poland is owned by right of freehold or absolute ownership. The economy is largely dependent on income from exports and has seen liberalization in recent years. Poland is ranked amongst the new member nations of the EU that may soon achieve alignment with the economic standards set by the EU to join the Euro zone. This is already impacting the property prices in the country, and these are rising. Another reason for the rise in prices is access to EU aid that serves to create infrastructure development and boost the economic growth of Poland.
Rents are rising as well, largely due to: an influx of employers from the West, looking for low-cost, educated work force and reduced overhead expenses. Increased numbers of expatriates in the country are also creating a demand for high quality residential real estate. Furthermore, data suggests that the bulk of East Europeans prefer to live as tenants as opposed to owners - a major social and cultural factor to consider if you wish to ‘buy to let’.
Average rental yields are estimated to be a healthy 5%, and many people see major possibilities in off plan investment properties. While there are all levels of housing available, the safest bet may be the mid market price range options. These are likely to see the most appreciation, particularly if held for the long term. While it may seem risky to invest in an emerging market that you may know little about, consider that the returns on your capital also have the potential to be large. The capitalized western markets offer very low growth; even countries like Spain have seen most of their growth already. Eastern Europe is regarded as the next big thing by a number of investors looking to double their money.
Further incentives are provided by Polish rules that provide a capital gains tax holiday and freedom from value added tax (VAT) for properties that are sold after a five year period. The country has focused on reducing the limitations and paperwork surrounding overseas investment property for foreign nationals. Several billion dollars will be invested in the Polish real estate market over the next few years, and this is sure to create pressure on the prices. Exciting new developments are coming up in Warsaw and other historic cities such as Wroclaw offer opportunities from property development and resale.
However, a final word of caution: Poland has its share of con artists like any other country, so select your lawyer and agent carefully. One possibility is to get your local agency to handle the deal for you, so find out whether they deal in overseas investment property. You will need a local lawyer as well so ask others who have bought real estate, particularly buy to let property in Poland. As with any major investment – do your research and get good advice!
Saturday, December 23, 2006
Buying Property at Below Market Value
Buying a property is not an easy task, and with the rising costs, the would-be home owners and investors in this market are struggling to find good deals. While these are harder to come by, they are still available if you are willing to do some groundwork and put time and effort into the research stage. Searching for property below market value will significantly improve your investment and diminish the risk of negative equity, since there will be some profit on the sale price to absorb the reduced value. There are several techniques used to obtain property at below market value such as:
Buy property at Auction
Many properties are sold by estate agents at auction, at around 10% to 20% below market value. Be sure to find out why these properties are being sold at auction, rather than through the normal process. There is good potential here and a lot of investors use auctions to purchase properties quickly and under market price. At an auction, you will need to pay a cash deposit of up to 20% immediately if you win. Also, each property needs to be thoroughly surveyed before you can bid on it, and this is expensive and time consuming, particularly for a large number of properties. Therefore, mostly experienced investors buy through auctions, and a first time buyer or a home buyer is best advised to stay away from the process till they gain more experience. There are property advisory services that offer assistance to novice buyers at auctions but I would always recommend extreme caution.
Buying Foreclosure or Repossession property
For the average investor, if the opportunity arises, it is best to buy foreclosure or repossession properties through an estate agent who can get you a good deal without the hassle of going to auctions. You will need to be very vigilant because these properties get snapped up very quickly, due to the likelihood of getting a good price and the reliability provided by the agent or society. Also find out if you need to pre-qualify or set up your finances with a building society before you can gain access to these types of deals.
Property Development
If you have the time, money and interest, you can buy a renovation property and undertake some property development to sell it at a higher price. For instance, you can purchase at $80,000, make repairs worth $8,000 and sell at $100,000.
Property Development Share Scheme ** HOT **
There are a few schemes available where groups of small investors group together to develop a property to sell on completion. This can attract very good interest. It is essential for buyers to get good advice if taking up this option. Alternatively, buyers may take the option of joining a managed scheme. I have taken this option myself as one of my streams of property development. My first project is underway. For a modest investment I am on track to receive 20% return on investment in 6 months. I will update this blog as the development progresses. Of all my investments, this is by far the most exciting and the most promising. For more information on this scheme click here.
Motivated seller
In some circumstances the property owner may want to sell their property quickly. If so, there is an opportunity for a cash buyer to secure a very good discount.
Other than the above modes, you can also use the newspaper and magazines to find properties sold directly through the owners. This can make it easier to negotiate a better price by forming a relationship with the seller. Further, some websites offer good deals on real estate as well as brokerage rates as low as half a percent. Do your homework, put in a little sweat, and you may find yourself sitting on a goldmine.
Buy property at Auction
Many properties are sold by estate agents at auction, at around 10% to 20% below market value. Be sure to find out why these properties are being sold at auction, rather than through the normal process. There is good potential here and a lot of investors use auctions to purchase properties quickly and under market price. At an auction, you will need to pay a cash deposit of up to 20% immediately if you win. Also, each property needs to be thoroughly surveyed before you can bid on it, and this is expensive and time consuming, particularly for a large number of properties. Therefore, mostly experienced investors buy through auctions, and a first time buyer or a home buyer is best advised to stay away from the process till they gain more experience. There are property advisory services that offer assistance to novice buyers at auctions but I would always recommend extreme caution.
Buying Foreclosure or Repossession property
For the average investor, if the opportunity arises, it is best to buy foreclosure or repossession properties through an estate agent who can get you a good deal without the hassle of going to auctions. You will need to be very vigilant because these properties get snapped up very quickly, due to the likelihood of getting a good price and the reliability provided by the agent or society. Also find out if you need to pre-qualify or set up your finances with a building society before you can gain access to these types of deals.
Property Development
If you have the time, money and interest, you can buy a renovation property and undertake some property development to sell it at a higher price. For instance, you can purchase at $80,000, make repairs worth $8,000 and sell at $100,000.
Property Development Share Scheme ** HOT **
There are a few schemes available where groups of small investors group together to develop a property to sell on completion. This can attract very good interest. It is essential for buyers to get good advice if taking up this option. Alternatively, buyers may take the option of joining a managed scheme. I have taken this option myself as one of my streams of property development. My first project is underway. For a modest investment I am on track to receive 20% return on investment in 6 months. I will update this blog as the development progresses. Of all my investments, this is by far the most exciting and the most promising. For more information on this scheme click here.
Motivated seller
In some circumstances the property owner may want to sell their property quickly. If so, there is an opportunity for a cash buyer to secure a very good discount.
Other than the above modes, you can also use the newspaper and magazines to find properties sold directly through the owners. This can make it easier to negotiate a better price by forming a relationship with the seller. Further, some websites offer good deals on real estate as well as brokerage rates as low as half a percent. Do your homework, put in a little sweat, and you may find yourself sitting on a goldmine.
Thursday, December 21, 2006
Property Purchase for Holiday Let
Short term letting, over holidays and peak season times, is becoming a popular way to make money. You may have heard some people say that three good months are enough for them to pay the year’s mortgage. This may be true of some properties, but not of all, so make sure that you select your property with care if you intend to let it out during the holidays. While a good property can provide you with a much needed investment property pension in terms of both lucrative rent and a property asset.
Some tips for success in the holiday rentals market:
1) Competitive pricing – assess the value of your property by comparing it to other similar places in the area and keep the rent competitive in the marketplace. Remember that your property may be great but you have to make it attractive to beat you competition and without compromising your profit.
2) Try to find a property with a great USP – a special view is always popular. A place with a view will command a premium. Proximity to the beach or to local attractions is always a money maker. Think of the main reason that tourists frequent your selected region or country – is it for the great nightlife? Then try to find a good place near the bars or nightclubs.
3) Décor – decorate your place tastefully within your budget. Everyone wants to stay in an aesthetic accommodation, particularly while on holiday. You may find yourself asked to provide pictures of the property, indoors and out, so make it as attractive and commodious as possible.
4) Agent – chances are that you do not live in the same area as your holiday rental. It may then be useful to hire a local agent to handle the administrative tasks, as well as provide a point of contact for the guests.
5) Research – do your homework thoroughly to ensure that you are not being defrauded. Visit the site personally and oversee all paperwork. Do not rely on a local property agent completely.
6) Local regulations – make sure that you adhere to local rules for renting your property. For instance, in France, you will be asked to provide a written agreement between the landlord and the tenant. There may be rules regarding renters insurance as well.
7) Insurance – Make sure that your insurance company knows that the property will be used as a holiday let when you sign the agreement. There must not be any clauses prohibiting it.
8) Taxes – find out about your home country taxes on owning holiday rental properties and how the rental income will be treated. It’s wise to ascertain local rules as well to that effect. Know whether the property will be treated as commercial and how much tax liability it will attract.
9) Rental payments – make sure you work out how and when you will receive the rent payments, especially if your property is overseas.
10) Remember that to make money, you need to resist the temptation to stay in your own property during the holidays.
That said, there is still plenty of money to be made off the holiday rental market if you choose the right property and handle the administration effectively. Always get good advice and carry out your own research before proceeding.
Some tips for success in the holiday rentals market:
1) Competitive pricing – assess the value of your property by comparing it to other similar places in the area and keep the rent competitive in the marketplace. Remember that your property may be great but you have to make it attractive to beat you competition and without compromising your profit.
2) Try to find a property with a great USP – a special view is always popular. A place with a view will command a premium. Proximity to the beach or to local attractions is always a money maker. Think of the main reason that tourists frequent your selected region or country – is it for the great nightlife? Then try to find a good place near the bars or nightclubs.
3) Décor – decorate your place tastefully within your budget. Everyone wants to stay in an aesthetic accommodation, particularly while on holiday. You may find yourself asked to provide pictures of the property, indoors and out, so make it as attractive and commodious as possible.
4) Agent – chances are that you do not live in the same area as your holiday rental. It may then be useful to hire a local agent to handle the administrative tasks, as well as provide a point of contact for the guests.
5) Research – do your homework thoroughly to ensure that you are not being defrauded. Visit the site personally and oversee all paperwork. Do not rely on a local property agent completely.
6) Local regulations – make sure that you adhere to local rules for renting your property. For instance, in France, you will be asked to provide a written agreement between the landlord and the tenant. There may be rules regarding renters insurance as well.
7) Insurance – Make sure that your insurance company knows that the property will be used as a holiday let when you sign the agreement. There must not be any clauses prohibiting it.
8) Taxes – find out about your home country taxes on owning holiday rental properties and how the rental income will be treated. It’s wise to ascertain local rules as well to that effect. Know whether the property will be treated as commercial and how much tax liability it will attract.
9) Rental payments – make sure you work out how and when you will receive the rent payments, especially if your property is overseas.
10) Remember that to make money, you need to resist the temptation to stay in your own property during the holidays.
That said, there is still plenty of money to be made off the holiday rental market if you choose the right property and handle the administration effectively. Always get good advice and carry out your own research before proceeding.
Wednesday, December 20, 2006
Property Investment In The UK
The United Kingdom is formed by four countries – England, Scotland, Northern Ireland and Wales. The property market is therefore, huge and varied, and although not as sunny as Spain or as exciting as Cape Verde, there are plenty of options for everyone. Lately, there has been a lot of interest in the UK property investment market, since people have begun to realize that their homes are their best performing asset. This has prompted a number of amateur property tycoons to enter the market without a proper understanding of the factors surrounding the movements of this potentially rewarding segment.
A report from Nationwide’s ‘buy to let’ arm, UCB Home Loans, claims that the UK property investment market is strong. Amongst the reasons, the top one that emerges is the current low rate of return in the stock market. Further, access to easy funding is making buy to let more appealing than investing in equities. Recent appreciation in house values is also giving impetus to the idea of investment property pension. Rents in London and the South Eastern region are rising as well, so landlords stand to make more money. With price tags on houses hitting highs, more potential buyers are compelled to rent, meaning rise in number of tenants. The arrival of more immigrants and overseas students also gives a boost to the overall number of would-be renters.
With the strong demand and clear increase in the prices of homes in the UK, there are certain areas that are becoming the favorites for buy to let investors, such as London, Aberdeen, Belfast, Swindon, Southampton and Preston, amongst others. However, there are areas where the market seems to be increasingly saturated and potential for returns is diminishing. Another concern is that higher interest rates may squeeze profit margins. Add to that the possible low yield that accompanies appreciation in capital, and you will realize that caution is required in this market.
Important factors to remember while purchasing property in the UK are:
1) Do your homework – research is essential. Also remember that there are maximum cut-off prices over which you would be unwise to buy. Get professional help if possible, or else try to attend a workshop on property investment.
2) Consider property development – buying a renovation property at lower prices can allow you to improve the property and land, and increase its value considerably.
3) Consider property development through a ‘share scheme’ – sharers take on the role of property developer, buying land and building one or more houses or a block of apartments.
4) Factor in capital gains tax that will be payable for any amount over your annual allowance. If you are thinking of property development, consider residing in your ‘buy to let’ property while you develop. This may allow tapering of the capital gains tax at the time of selling. Consult a tax specialist for more details on this.
5) Choose the right type of financing – residential mortgages carry a lower rate of interest but a buy to let mortgage will allow you to borrow against the expected resale value of the home. If appreciation is anticipated or you plan property development, this is a useful feature.
6) Be wary of any attached strings in your mortgage agreement that could hamper the profitability of your investment in the future.
7) Consider investment in commercial property – in the UK you can include this in a SIPP (Self Invested Pension Plan) scheme. Always seek advice from a qualified financial or pension advisor.
In conclusion, I believe, while the huge gains maybe rarer than before in the UK property investment market, there is still a premium to be made, if you invest wisely – but always get advice before proceeding!
A report from Nationwide’s ‘buy to let’ arm, UCB Home Loans, claims that the UK property investment market is strong. Amongst the reasons, the top one that emerges is the current low rate of return in the stock market. Further, access to easy funding is making buy to let more appealing than investing in equities. Recent appreciation in house values is also giving impetus to the idea of investment property pension. Rents in London and the South Eastern region are rising as well, so landlords stand to make more money. With price tags on houses hitting highs, more potential buyers are compelled to rent, meaning rise in number of tenants. The arrival of more immigrants and overseas students also gives a boost to the overall number of would-be renters.
With the strong demand and clear increase in the prices of homes in the UK, there are certain areas that are becoming the favorites for buy to let investors, such as London, Aberdeen, Belfast, Swindon, Southampton and Preston, amongst others. However, there are areas where the market seems to be increasingly saturated and potential for returns is diminishing. Another concern is that higher interest rates may squeeze profit margins. Add to that the possible low yield that accompanies appreciation in capital, and you will realize that caution is required in this market.
Important factors to remember while purchasing property in the UK are:
1) Do your homework – research is essential. Also remember that there are maximum cut-off prices over which you would be unwise to buy. Get professional help if possible, or else try to attend a workshop on property investment.
2) Consider property development – buying a renovation property at lower prices can allow you to improve the property and land, and increase its value considerably.
3) Consider property development through a ‘share scheme’ – sharers take on the role of property developer, buying land and building one or more houses or a block of apartments.
4) Factor in capital gains tax that will be payable for any amount over your annual allowance. If you are thinking of property development, consider residing in your ‘buy to let’ property while you develop. This may allow tapering of the capital gains tax at the time of selling. Consult a tax specialist for more details on this.
5) Choose the right type of financing – residential mortgages carry a lower rate of interest but a buy to let mortgage will allow you to borrow against the expected resale value of the home. If appreciation is anticipated or you plan property development, this is a useful feature.
6) Be wary of any attached strings in your mortgage agreement that could hamper the profitability of your investment in the future.
7) Consider investment in commercial property – in the UK you can include this in a SIPP (Self Invested Pension Plan) scheme. Always seek advice from a qualified financial or pension advisor.
In conclusion, I believe, while the huge gains maybe rarer than before in the UK property investment market, there is still a premium to be made, if you invest wisely – but always get advice before proceeding!
Tuesday, December 19, 2006
Property investment in the Cape Verde Islands...
Sparkling blue waters and shimmering white sands define the islands that form the magical Cape Verde. The exotic locale is situated off the west coast of Africa, close to Senegal in the North Atlantic Ocean. With almost a thousand kilometers of coastline, Cape Verde is an ideal holiday destination that remains largely untouched by commercialism. The islands are divided in 2 main groups – the Barlavento or Northern islands of Boa Vista, Santa Luzia, Sal, Santa Vicente, Santa Antao and Santa Nicolau, and the Sotavento or Southern islands of Santiago, Maio, Brava and Fogo. The population of the island is less than half a million, but the influx of tourists causes that number to soar over some months of the year.
The string of volcanic islands is unoccupied, except for the ones mentioned above. The climate is described as a mix of temperate and tropical, since the temperature is a warm 75 degrees most days and there is little rainfall. The languages spoken are mainly Portuguese and Creole, with the population and cuisine being a delightful mix of European and African.
The reasons for overseas property investment in Cape Verde islands are numerous. Visitors pour in from Italy, the UK and Europe in particular with daily flights from Lisbon and the UK. Property prices remain competitive, especially in comparison to some of the more crowded holiday destinations such as the Caribbean. The government allows foreigners to own overseas investment property in Cape Verde. Additionally, the political stability of the country adds to its attraction as an investment destination. To provide incentive to investors, the government introduced a law in 1993 that provides a five year tax holiday for the foreigners who purchase overseas investment property in Cape Verde and a 50% tax reduction on corporate tax for the following 10 years.
The government is investing heavily in tourism, and is offering further sanctions and write-offs to foreigners who wish to enter the tourist market in the islands. Infrastructure development is continuing at a healthy pace in the small nation, which has one of the highest Human Development Indexes in Africa. There is plenty of opportunity for everyone in Cape Verde – whether you are looking for a villa, townhouse, condo, or a new development, you’ll find it here. There may not be as much scope for property development as in many other locations, since most houses are fairly recently constructed. Sal Island is among the more popular places in Cape Verde and has seen a lot of development over the past few years. In spite of this, a small condo can be purchased (at time of writing) on the island for less than $50,000.
Accounts in foreign currencies are easily opened in Cape Verde and many analysts expect competition to drive down airfares. A brand new international airport has been unveiled in the capital city of Praia, in Santiago. While tourism is a focus, the government is well aware of the importance of preserving the unique culture and environment of Cape Verde and has taken steps to ensure this principle is upheld during all construction efforts. That said, transportation infrastructure, electricity, water, sanitation, communication development as well as golf courses, marinas, luxury resorts and apartment complexes are coming up fast in this part of the world.
The string of volcanic islands is unoccupied, except for the ones mentioned above. The climate is described as a mix of temperate and tropical, since the temperature is a warm 75 degrees most days and there is little rainfall. The languages spoken are mainly Portuguese and Creole, with the population and cuisine being a delightful mix of European and African.
The reasons for overseas property investment in Cape Verde islands are numerous. Visitors pour in from Italy, the UK and Europe in particular with daily flights from Lisbon and the UK. Property prices remain competitive, especially in comparison to some of the more crowded holiday destinations such as the Caribbean. The government allows foreigners to own overseas investment property in Cape Verde. Additionally, the political stability of the country adds to its attraction as an investment destination. To provide incentive to investors, the government introduced a law in 1993 that provides a five year tax holiday for the foreigners who purchase overseas investment property in Cape Verde and a 50% tax reduction on corporate tax for the following 10 years.
The government is investing heavily in tourism, and is offering further sanctions and write-offs to foreigners who wish to enter the tourist market in the islands. Infrastructure development is continuing at a healthy pace in the small nation, which has one of the highest Human Development Indexes in Africa. There is plenty of opportunity for everyone in Cape Verde – whether you are looking for a villa, townhouse, condo, or a new development, you’ll find it here. There may not be as much scope for property development as in many other locations, since most houses are fairly recently constructed. Sal Island is among the more popular places in Cape Verde and has seen a lot of development over the past few years. In spite of this, a small condo can be purchased (at time of writing) on the island for less than $50,000.
Accounts in foreign currencies are easily opened in Cape Verde and many analysts expect competition to drive down airfares. A brand new international airport has been unveiled in the capital city of Praia, in Santiago. While tourism is a focus, the government is well aware of the importance of preserving the unique culture and environment of Cape Verde and has taken steps to ensure this principle is upheld during all construction efforts. That said, transportation infrastructure, electricity, water, sanitation, communication development as well as golf courses, marinas, luxury resorts and apartment complexes are coming up fast in this part of the world.
Property Investment In Spain...
Ah, Spain…With its bull runs, famous beaches, sparkling nightlife and amazing history, there is enough here to captivate any tourist and make them stay forever. It is no surprise that sunny Spain continues to be a favorite amongst overseas investment property owners worldwide. ‘The Economist’ claims that Spanish property prices had seen an appreciation 3 times that of the European average in the period from 1995 to 2002. Over half a million Britons have invested in this potentially lucrative market, amongst the 3 million foreigners that call Spain home.
It is not merely Spain’s easygoing lifestyle and European-standard infrastructure that attracts investors. Poor performance of equity markets and pension schemes promotes demand for overseas investment property. A million more new residents are expected in Spain over the next few years and the market gives indications of being firm. New developments and older properties are widely available. Off-plan property investment still offers good returns in Spain, provided you pick the right location. Further, prices in the market overall are lower than many other countries like the UK or US, making the investment accessible to a younger buyer or to seekers of investment property pensions. The rental market in Spain is sizeable, with tourists searching for self-catered options. This can provide the owner of a buy to let property with funds to pay off installments and even make a buck.
Whether your interest in Spain comes from a desire to earn through an investment property pension or simply live in paradise when you retire, there is a place for you under the Spanish sun. The most popular destinations are Costa del Sol, Costa Blanca, the Canary Islands and the Balearic Islands. While these are crowded and expensive, some analysts say that prices in this region may fall in coming years. However, there is a rise expected in the southern interior, with its gorgeous villages full of snow-white structures against brilliant blue skies, and in the northern interior, a place full of charm and character. Pastoral areas such as Catalonia and Galicia as well as urban developments such as Barcelona, Granada and Seville are fast becoming hotspots for buy to let investors or those seeking property development opportunities on colonial houses.
With increase in air traffic, more low cost airlines available and better road infrastructure, the tourist inflow to different parts of the country is rising. While a couple of hundred thousand dollars cannot buy you much on the popular coasts, you can purchase a great place in beautiful Granada, an hour and a half drive to Costa del Sol.
When buying property in Spain, factors to consider are:
1) Make sure you understand the local rules and regulations. Find a reliable agent who offers overseas investment property but be sure to shop around for quotes.
2) There is a lot of potential in widely available, wonderful historic houses for property development to increase the value of your house, but be warned that renovation in Spain can take longer than planned.
3) The true value in the Spanish property market is not in quick turnaround but in a solid long-term investment, so look for something that will stand the test of time.
4) When you buy off-plan investment property, the prices rise as the project approaches completion. If you choose to sell at this time, you may not pay capital gains tax. Most people buy to let in Spain, especially if they are overseas investors, so look for a great USP in your selected property that can be used to attract tourists. That is why I opted for Tres Molinos!
It is not merely Spain’s easygoing lifestyle and European-standard infrastructure that attracts investors. Poor performance of equity markets and pension schemes promotes demand for overseas investment property. A million more new residents are expected in Spain over the next few years and the market gives indications of being firm. New developments and older properties are widely available. Off-plan property investment still offers good returns in Spain, provided you pick the right location. Further, prices in the market overall are lower than many other countries like the UK or US, making the investment accessible to a younger buyer or to seekers of investment property pensions. The rental market in Spain is sizeable, with tourists searching for self-catered options. This can provide the owner of a buy to let property with funds to pay off installments and even make a buck.
Whether your interest in Spain comes from a desire to earn through an investment property pension or simply live in paradise when you retire, there is a place for you under the Spanish sun. The most popular destinations are Costa del Sol, Costa Blanca, the Canary Islands and the Balearic Islands. While these are crowded and expensive, some analysts say that prices in this region may fall in coming years. However, there is a rise expected in the southern interior, with its gorgeous villages full of snow-white structures against brilliant blue skies, and in the northern interior, a place full of charm and character. Pastoral areas such as Catalonia and Galicia as well as urban developments such as Barcelona, Granada and Seville are fast becoming hotspots for buy to let investors or those seeking property development opportunities on colonial houses.
With increase in air traffic, more low cost airlines available and better road infrastructure, the tourist inflow to different parts of the country is rising. While a couple of hundred thousand dollars cannot buy you much on the popular coasts, you can purchase a great place in beautiful Granada, an hour and a half drive to Costa del Sol.
When buying property in Spain, factors to consider are:
1) Make sure you understand the local rules and regulations. Find a reliable agent who offers overseas investment property but be sure to shop around for quotes.
2) There is a lot of potential in widely available, wonderful historic houses for property development to increase the value of your house, but be warned that renovation in Spain can take longer than planned.
3) The true value in the Spanish property market is not in quick turnaround but in a solid long-term investment, so look for something that will stand the test of time.
4) When you buy off-plan investment property, the prices rise as the project approaches completion. If you choose to sell at this time, you may not pay capital gains tax. Most people buy to let in Spain, especially if they are overseas investors, so look for a great USP in your selected property that can be used to attract tourists. That is why I opted for Tres Molinos!
Saturday, December 09, 2006
Have I made the right decision?
There isn't a day goes by when I don't see a headline stating the future crash in the property market in the UK and possibly further afield. I guess I wouldn't be human if I didn't question my decision to invest in the property market at a time when everyone else is saying the "glory days are over". Only time will prove me right or wrong!
Somedays I wake up and think I have nothing to lose and plenty to gain. Other days the reality that I could either lose my home or extend my working life into my 80's if the market crashes. I have never been afraid of taking risks - and I think I am doing my best to spread my risk as far as type of property type and location is concerned. So, for now at least, the excitement and sense of adventure outweighs the fear of failure.
I woke up to a fantastic sunny morning, so that confirms my decision to invest in property was the right thing to do. Maybe I should relocate to a country with more sun and less rain than London. Then I would wake up in a positive frame of mind every morning? Not before I go and see the latest James Bond movie, Casino Royale - it won't be the same with sub-titles :o)
Until the next time...
Somedays I wake up and think I have nothing to lose and plenty to gain. Other days the reality that I could either lose my home or extend my working life into my 80's if the market crashes. I have never been afraid of taking risks - and I think I am doing my best to spread my risk as far as type of property type and location is concerned. So, for now at least, the excitement and sense of adventure outweighs the fear of failure.
I woke up to a fantastic sunny morning, so that confirms my decision to invest in property was the right thing to do. Maybe I should relocate to a country with more sun and less rain than London. Then I would wake up in a positive frame of mind every morning? Not before I go and see the latest James Bond movie, Casino Royale - it won't be the same with sub-titles :o)
Until the next time...
Thursday, December 07, 2006
Where is Tres Molinos?
When I heard about an ‘off plan’ property investment opportunity in Tres Molinos, near Murcia, Spain, I just had to get involved. The description sounded so good I almost packed up home and booked the first flight. This was a significant decision for me as it was my first venture into property investment.
I have been unhappy with the progress of my pension for some time. Several years ago it was fairly healthy and I was looking forward to a reasonable lifestyle in my retirement. In recent years the situation has declined rapidly and retirement disappeared from my radar.
While surfing the web recently, I stumbled across an opportunity to get involved in a property development sharing scheme. When I first looked into it I thought is was just too good to be true and perhaps another scam. Any negative thoughts disappeared after I had spoken to the scheme founder (Alan) so I decided to get involved.
Alan introduced me to one of his other investors, who had, like me, decided to join the scheme. However, as a fairly experienced property investor, this was just one of several ventures he was running with. He described Tres Molinos and I was hooked! Two months later, I have three ‘off plan’ developments underway, shares in a property development scheme and future property opportunities in Cape Verdi and Poland. My pension is getting a healthy boost and my retirement is back on the radar.
My ventures might be an amazing success or they might all fall down around my ears. Whatever happens, I thought it would be good to share my experiences in an attempt to help other novice property investors and to serve as a personal record. I have never kept a diary before so this is a whole new experience, I hope you find it interesting and useful.
I have been unhappy with the progress of my pension for some time. Several years ago it was fairly healthy and I was looking forward to a reasonable lifestyle in my retirement. In recent years the situation has declined rapidly and retirement disappeared from my radar.
While surfing the web recently, I stumbled across an opportunity to get involved in a property development sharing scheme. When I first looked into it I thought is was just too good to be true and perhaps another scam. Any negative thoughts disappeared after I had spoken to the scheme founder (Alan) so I decided to get involved.
Alan introduced me to one of his other investors, who had, like me, decided to join the scheme. However, as a fairly experienced property investor, this was just one of several ventures he was running with. He described Tres Molinos and I was hooked! Two months later, I have three ‘off plan’ developments underway, shares in a property development scheme and future property opportunities in Cape Verdi and Poland. My pension is getting a healthy boost and my retirement is back on the radar.
My ventures might be an amazing success or they might all fall down around my ears. Whatever happens, I thought it would be good to share my experiences in an attempt to help other novice property investors and to serve as a personal record. I have never kept a diary before so this is a whole new experience, I hope you find it interesting and useful.
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