Where To purchase And Where Not To purchase
One of car insurance quick quote issues over the last few years, both in that country and overseas has been investors buying into off plan, life insurance quotes new build developments along with 100s of other investors and all completing at the same time.
that is bad for many reasons. So many come on the market at once that it can be hard educational loan consolidation find tenants, and therefore voids are long. So what happens? Investors desperate to get tenants, drop the asking price for rent often below the repayment level. that then has a detrimental effect on their cashflow, and affects the market rent ie reduces for all other investors.
You then will get a few investors who cannot afford to carry a negative cashflow for long and therefore must sell. But because the agents are only really interested in selling more off plan units to investors and car insurance costs is no local demand then the re-sale market is very poor. Often then any supposed discount that investors thought they had managed to get when they bought, have long gone and in fact you can find Idaho Lemon Laws that supposed discounted price is above the true market value.
So ongoing it can be competitive and in the short to medium term there can also be no clear exit strategy. Always think about that - who is likely to purchase your property from you? that has always been my issue with premium priced 2 bed apartments in the UK, and many overseas developments only pitched to UK investors.
That is why in that country I recommend buying where locals purchase ie more traditional 2-3 bed terraced or tenement properties under 100,000 where will be good demand when come to sell. And overseas I recommend buying in developments where at minimum 50% is sold to the local property market. If the locals are not interested in buying at today's prices, ask yourself why would they be further down the line when prices have hopefully gone up? So if are keen to purchase in a country, check local demand for the property type you are looking at - and if not particularly high, find a development where demand is higher!
I have seen too many developments sold purely to UK and Irish investors, who on completion find no strong exit strategy, and limited rental return - in countries and locations as diverse as Florida - the tourist areas rather than long term rental areas, Goa, the Carribean, Cyprus and Spanish resorts, the Bulgaria black sea coast, or closer to home examples would include Birmingham city centre or Glasgow harbour. Deals may sound mouth watering, but remember if there is no exit strategy or strong rental demand, is not so attractive!
There are plenty of developments out there that are attractive to locals - so look for these opportunities, and don't take the risk of buying alongside only UK investors! The only exception I would put on that is if the rental yields are so high that there will still be strong demand from investors, even if prices rise by 20-30%.
Alan Forsyth is a leading property expert based in the UK. He writes regularly for property publications, and is considered an expert on UK and Overseas investing. He runs the two websites at www.property-investment-deals.comwww.property-investment-deals.com and www.property-investment-tips.comwww.property-investment-tips.com which have over 6000 free subscribers. They source high yielding, low deposit deals in the UK and Emerging Markets. For more information, check out the websites, or call 0115 947 4155 or email
