Investing In Overseas Property
Spoilt for Choice?

Looking to make money by investing in overseas property?

The world is your oyster.

But which country will you choose?

WAIT!

Before you go ahead and make any decisions, let's first get one thing straight:

Why do you want to invest abroad?

In other words, what exactly are you after?

My best guess is that you've just done a spot of dreaming. You probably read a glossy overseas property magazine and had a wistful thought of sitting by the swimming pool, relaxing in the sun with an iced drink at your side.

Seriously… this is what motivates most people when they consider investing in overseas properties. They get captivated with these images and forget WHY they're investing abroad.

Don't believe me? Try searching for "property forums" on Google. You'll find hundreds of REAL people cursing about how SILLY they were when they naively invested in countries where they mistakenly thought they'd get a good return. In the end, they were disappointed because they didn't have a clear property investment strategy.

I have no doubt that most of these people fell for the sales hype, either on a property inspection trip or at one of those overseas property exhibitions.

You need to be absolutely clear on why you want to invest abroad!

Here are the three most common reasons why people purchase overseas property:

• To purchase a vacation/retirement home

• To purchase rental property that will bring in an extra income

• To purchase a property to flip and release capital before it is built up (this is known as an off-plan investment)

Let's quickly look at each of them.

Vacation/Retirement Home

Do you want to be near your family? Will you really want to travel to the same place every year?

Remember that this will be your HOME. Do you really want to have tenants occupying the premises while you're not there?

My guess is that you want privacy, enjoyment, and peace and quiet. And access to health care and everyday facilities is also important to you. If this is a good description of what you’re looking for when investing in overseas property, then WHERE you invest doesn't matter too much, as long as you have good weather and adequate shopping and other services near your property.

Rental Income/Capital Appreciation

If you’re considering investing in overseas properties primarily for financial gain, you need to clarify your goals. You must decide whether you want steady income, capital appreciation, or a combination of the two. If you're investing in popular tourist areas, consider the length of the tourist season. It's no good buying property where the rental season is short.

For example, some countries have only a three-month rental seasons at their beach and ski resorts. Naturally, the longer the tourist season, the higher your overall returns will be.

For capital appreciation, you need to buy international property in widely recognized tourist areas or in an up-and–coming emerging market. And of course, you must be aware of the competition.

In some places, each and every new development on the block is going to be put up for sale by high-powered marketing teams that will pounce on the best customers. You’ll have to compete with them on both price and quality.

Personally, I would prefer to invest in a development company and let it do all the hard work.

Off-Plan Investments

Off-plan investments require a more in-depth analysis than I can provide in this article. Please click here to read about off-plans in greater detail, and then come back to this page to continue our discussion about investing in overseas property.

Western European Property Markets

Property Markets In Germany	Property Markets In Italy

In most Western European countries, for more than a decade, property prices have outpaced inflation and now it seems like there is nowhere left for them to go but DOWN.

Visit Spain, and you'll see that all along the Costa there has been frantic development for the past fifty years. Now the property market is in serious trouble, with real estate agents going bankrupt and large swathes of vacant property. If you're looking to buy overseas property in Spain, spend a couple of months there, where you’ll find plenty of resale bargains.

When these countries became part of the euro zone, billions of pounds poured into their economies. The European Union and foreign direct investment helped to stimulate these countries’ economies and create new jobs.

If you travel around Eastern Europe, you'll see a chronic shortage of modern buildings. During the Second World War, communist rulers built pre-fab housing for the majority of the population. These buildings are now crumbling and will need to be replaced with new construction to house the burgeoning middle-class population.

These countries are experiencing a construction boom and my guess is that over the next couple of decades, property values in Eastern Europe will catch up with the those in the more traditional Western European markets. So, if you're looking for solid capital growth head east.

Asia Property Markets

Property Investment In Thailand
Asia has the fastest-growing regional economy in the world and is creating tremendous investment opportunities for real estate investors. Some of the prime countries for investment include India, China, and Thailand.

India's economy is booming, partly due to the continued expansion of its service sector, which is bolstered by outsourcing from Europe and North America.

China is also getting richer by the minute. The nation’s GDP grew by 9% in 2005, and 8.2% in 2006. The economy seems to be unstoppable. Analysts predict that, in a decade, China will have the largest economy in the world.

The vast wealth of the oil rich countries in the Middle East is unbelievable. Visit the Middle East and check out the cars that the local people drive, from Bentleys to Porsches.

The property markets in these Middle Eastern regions are expanding at unprecedented rates, with mega-sized construction and development projects announced daily.

Some of the notable property development projects that are currently under construction or have recently been completed include the only seven-star hotel in the world (Burj Al Arab hotel), the world's largest shopping mall and indoor ski resort, the world's tallest building (the Burj Dubai), an entertainment and leisure city twice the size of Florida’s Disneyworld (Dubailand), and the Dubai’s three Grand Palm Islands: Palm Jumeirah, Palm Jebel Ali, and Palm Deira.

Most of the UK’s quantity surveyors are working in the Middle Eastern markets to help during this construction boom. Is it any wonder that the RICS in the UK have a severe shortage of quantity surveyors?

More and more investors are considering investing in overseas properties in exotic destinations like Morocco, Cuba, Cape Verde, and the Caribbean for their long-term returns.

Exotic destinations are promoted primarily to the tourist market. These are the countries where most of the off-plan real estate agents spend their time. Developers and the real estate agents who market their new projects make good money by targeting investors like you.

These tourist markets are driven mainly by foreign investors. Local people rarely purchase these properties, because they can't afford them. Therefore, the resale market is somewhat limited for the off-plan investor.

USA

As the U.S. dollar continues to fall, property prices in the States are becoming more affordable. If you buy property in the U.S. now, you can watch the value of the dollar continue to fall as the value of your investment does the same.

Over the past five years, property prices increased tremendously. As a result, cheap mortgages were offered to new home owners.

Unfortunately, now interest rates are rising relentlessly, and bankruptcy and repossessions are becoming increasingly common. I recommend leaving the USA alone for a few years, and coming back to pick up the pieces at a much lower price in the future.

In Conclusion

Generally speaking, investing in overseas properties is a long-term business. If you are looking for an investment of 20 years or longer, you should do well. But if you are looking for a quick return in 5 years or less, you could be in for some nasty surprises, and I recommend that you look for something a little more liquid.

And one more thing… STOP listening to the salesperson who talks about discounts and tells you how much property values increased last year and the year before. Instead, look at the countries’ economic and social fabric. It doesn't matter if the country is poor. What matters is whether the country’s economy is growing.

Find out whether a solid middle class is developing in the country you’re interested in. See if the economy is improving, because this will lead to higher wages and, therefore, an increase in disposable income. These are the factors that will drive up property prices over time.

Also, ask yourself whether mortgages are available to the locals. If not, will they be available soon? Remember that if mortgages become available to the locals, then property prices will increase.

As a final remark, remember what drove UK house prices to where they are today: a large middle-class population, low interest rates, wage growth that outpaced inflation, and the availability of sophisticated mortgages to fund real estate investments.

When you’re investing in overseas properties, it’s best if these factors are not yet present in the country, but rather are on their way. In this situation, you can invest before the ideal conditions are present, and then be in a position to reap the rewards when property prices increase.

But if you're a truly brave investor, you should buy after a country goes bust. Most newly emergent countries go through a boom-and-bust cycle, which lasts an average of seven years. The bust is the period when the best bargains are available on overseas properties.

When you’re ready to begin seeking properties abroad, I recommend using an agent who is registered with The Association of International Property Professionals

Happy investing and don't forget to send me a post card!

Return from Overseas Property to Home Page

» Have you considered investing in Eastern European Property?
Thinking of investing in Eastern European Property? Discover where the best investments are. Estonia, Hungary, Latvia, Lithuania, Slovakia and Slovenia

» Is Central Europe Investment Property A Good Buy or Goodbye?
Discover why I recommend the Germany commercial property market instead of residential for your central Europe Investment property

» Best Investment Overseas Property Discover The Hot Spots! New!
Aware of the best investment overseas property locations? You may be missing out on the most lucrative areas. Read on to find out the actual hot spots…

» Buy To Let Abroad – Sun or City? Or perhaps both?!
Considering Buy To Let abroad? Should you choose a destination in the sun, or a city location? Find out what my recommendations are…

» How Do I Buy Overseas Property?
Read this article to find out what you need to know if you want to buy overseas property.

» Where Should You Buy Property Overseas?
If you’re looking to buy property overseas you’re going to want to know where are the best places to do so. Read on to find out my tips…

» The Right Time to Buy an Investment Property Abroad
Is this the right time to buy an investment property abroad, and if so, where? Find out what my thoughts are on overseas investment opportunities…

» The Key To Successful Overseas Property Investment
Successful overseas property investment isn’t as easy as it looks. Want to know how to earn the most money? Visit our site to learn the truth before you invest…

» Worldwide Property - Learn The Best & Worst Places To Invest
Worldwide property investment isn’t as easy as it may look. Find out where to invest and where to avoid to earn the highest returns!

ADD TO YOUR SOCIAL BOOKMARKS: Blink Del.icio.us Digg
Furl Google Simpy Spurl Technorati Y! MyWeb