The secret to successfully buying overseas real estate sounds simple: find the right property in the best location and buy it for the lowest price possible. But this foolproof formula is harder to get right than it sounds.
Knowing where to buy is invariably one of the challenges faced by any individual looking to invest in property and getting it right boosts both confidence and the bank balance.
Ideally, hotspots which can generate a mixture of capital appreciation and rental income are the desired destinations, but with uncertainty surrounding the economy and sustainability of many countries, they can be difficult to find.
Local letting agents will no doubt quote high rental yields to tempt you into making a purchase, but it is important not to take these figures at face value. Additional research is vital before any decisions are made, while past trends and future plans are important research tools.
Investment opportunity tends to present itself in countries where economic growth is strong and rising
, and an expanding workforce and population are also key factors in the choice. Furthermore, areas where there is a shortage of rental property may prove lucrative for those looking to Buy to Let
It has been argued by many that the current environment offers some of the best opportunities for long-term investors. But today's buyers should consider looking further afield from traditional popular destinations in favour of more exotic, emerging countries.
Rather than buying into a proven but expensive developed market, there are real estate investment opportunities in cheaper emerging markets. It is important to note, however, that the potential for large capital growth is offset by a higher risk environment. Economic volatility and political uncertainty could have a large effect on property values.
Another factor to look out for in emerging destinations is tourism growth, which can have a significant effect on long-term property prices as it can lead to government investment in infrastructure and also transport links.
Property still remains a tangible investment
and, although it is not without its pitfalls and risks, can provide a substantial return on investment if done correctly. As with any other type of venture, there will be peaks and troughs in value, but choosing your destination carefully generally results in good long-term rewards.
- Monday 28 June 2010