Overseas Investment Property

Overseas Property - Investing in a property abroad is now commonplace amongst Northern Europeans, so what do you need to know before you buy to sell or let?

A Place in the Sun TV programme certainly helped fuel people’s desires to buy Overseas Property. Many have bought in the established markets of Spain, Portugal, France and Cyprus over the past few years, but a new wave of buyers are entering the emerging markets as buy to sell or buy to let investors. This trend has been growing as domestic markets have priced out many first time buyers and individuals are turning to property as alternative investment to stocks and shares. 

Nubricks the Overseas Property Blog has a successful podcast series and has released a fly to let podcast that analyses the phenomenon of "Fly to Let", a term coined to describe the process of buying real estate abroad to rent out. In the UK, many investors are looking to acquire real estate in Europe and further a field for two reasons. Firstly to tap into the rising value derived from Europe's emerging EU countries with the prospect of making capital gains as the value of their real estate increases in line with improvements to infrastructure and developments and secondly, to generate an secondary income from rental yield. The first tactic of buying off plan and flipping to make high returns is often only practised successfully by a minority, as the fundamental key is monitoring the market to decide when to buy and sell. Buying to rent out however can prove to be an easier undertaking, offering the prospect of offsetting rental income against mortgage payments and costs, helping owners derive some value from their investment. 

Fly to let can essentially be applied to two types of property markets. The first of which is residential real estate and in emerging markets is often limited to major cities, which has the infrastructure and business to attract transient expat workers or affluent local residents seeking temporary accommodation. The second type of market is the holiday or vacation home market where real estate is bought to rent out to holidaymakers, many view a vacation property which has a dual function in terms of lifestyle and investment. 

Fly to Sell is the risky strategy and is generally seen as buying an off plan property with a view to flipping it either before or just after completion. Investors who use this strategy can reap the rewards, but timing is very important and a second buyer/investor is always needed to pay the profit. 

3 key points that all successful overseas property investor use: 

1) Do your research; Use the internet, speak to fellow buyers and don’t leave your brain on the plane!
2) Many agents and developers will recommend a lawyer to you; always seek independent legal advice to make sure you are being represented in your interest.
3) Plan marketing and exit strategies and make sure your expectations are realistic. 

Property Marketing - how you are going to attract your rental clients once you have bought, these days just giving a property to a local agent is not enough, you need to make sure that they are making the most of all the marketing channels available to them, especially the internet. 

Exit - What happens if there is a downturn in market, clients don't want to rent or your circumstances change? You need that get out of jail card or at the very least have anticipated a variety of scenarios positive and negative. 

Investment Hotspots on the Nubricks radar:

Grenada in the Caribbean is an up and coming Island, please see development Bacolet Bay Grenada for more details.
Romania and in particular the captial Bucharest has potential for good rental returns. See Planorama development for more details. 

Morocco is an up and coming holiday destination and in particular Marrakech is an established tourism hub attracting potential clients for a buy to let property. See Samanah Country Club Marrakech for more details.