Despite, and in some cases because of, the current
global economic crisis, there are still bargains to be had in overseas
property investments. By keeping an eye on developing countries
with stronger markets, currency fluctuations, and areas where property
prices are dropping from artificial highs, profitable investments
can be made. Here we offer some advice for those thinking of investing
in property overseas.
Reasons for the Price Drop
Due to the falling housing market in the UK, many UK-based second
home owners may find themselves having to sell-off properties that
they can no longer afford. The increased number of airlines going
bankrupt also means that fewer holiday makers will be visiting affected
areas, driving down property prices in those areas.
When looking at these bargain properties, think long and hard about
your destination of choice. If you are looking for a property abroad
for personal use, and for the long term, then look at areas that
you will want to visit again and again, possibly even to retire
to, and then just wait and see how low the price drops before buying.
Make Contacts
You’ll have better success at picking up a bargain if you
make contacts with estate agents in the area you would like to purchase
in. Let them know that you are interested in distress sales when
they arise. Although you may be getting a bargain due to someone
else’s misfortune, remember that you are helping the seller
out simply by buying at all.
Remember - Property Patterns can be Inconsistent
Although eastern and central European states recently entering the
EU have experienced property booms, this does not mean that the
markets of other European states soon to become EU members will
follow suit. Remember that the initial boom was due to foreign investment
in holiday homes and buy-to-let properties expected to be filled
with rich ex-pats sent to work in these areas. With multinational
companies now having their finances stretched, the chances are that
there will be less rich ex-pats entering the newer markets as their
companies try to cut back on expansion.
Do Not Over-Borrow
No matter where you decide to make your investments,
make sure that you do not borrow heavily against your chosen property.
Not only will this help to keep your mortgage payments down, but
it could mean you walking away with money still in your pocket should
the housing market begin to fall again.
Wander Off the Beaten Track
If you are willing to look further afield for your overseas property
it could save you a lot of money. There are real bargains to be
had, for example, if you do not mind a two hour drive from the airport
to your destination rather than one hour or less. Also, look to
the USA - overbuilding has occurred in many states, leading to an
excess of empty and unsold new build housing.
