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Investor's Tips
How safe is my investment?
Before any investment opportunity is offered to our clients it will have undergone extensive scrutiny by our trained staff. Even though we only offer property that has been developed by top class names in the property market, both at home and abroad, we take it further and check that the discounts are genuine and that rental yields, where quoted, are realistic and verified by local letting agents.
Mind set - Home vs investment
Looking at investment property decisions in the same light as your home can lead to some potentially disastrous mistakes. The things we take into consideration when buying our home are not the same as the practical financial calculations we use to assess investment property. Sound property investment decisions always come from the head and not the heart.
Property - Prices may fall
Because Capital Properties provides a survey on the properties offers the short term market fluctuations can be absorbed. Therefore, property investment is a medium to long term process and should always be looked at that way. Long term housing market growth is steady, short term fluctuations can be absorbed if you buy at the right price.
Demand - Will it continue to outstrip supply?
It is easy to feel that the past will not be repeated in the future and that what has been profitable for others will somehow change because we have decided to try it. It is essential therefore to look at statistical evidence to confirm future housing needs. In order to view the decision to enter the property investment market in a rational context, we draw your attention to the information from the report and statistics you can find in our services area, and ask for an initial advice contacting our consultants at info@capitalproperties.eu
Lower Property Prices
In the last few years the reduction in the capital value of the properties especially in the south of Europe, has outstripped the rental rates. This means that at least for now, to buy a Buy-to-Let property, with a bargain price consent you to put in a relatively small amount of your own capital to get an attractive rental income from the investment. With the actual credit crunch, the rental yields are increasing, and the properties prices declining or stables, so with so many rental property available, investors are turning to the lucrative property investment market for higher returns in the next future for an expected appreciation of the real estate.
Interest Rates
A Euro based mortgage is typically running at several basis points lower than a typical UK one. This means on most European and Overseas Investment Property you can get a mortgage from an overseas bank at a lower rate. Increasingly, UK lenders are establishing themselves in overseas locations to access a market where mortgages can be provided in foreign currencies.
Holiday Rental Market
Buying an investment property in Spain, Italy or France in the right areas, means that you'll have holiday rental potential. The holiday rental investment model is very different from residential letting as you need much less occupancy to be able to cover all your annual cost and make a rental profit. Weekly rentals in 'up and coming' or established holiday areas provide the chance to generate high rental yields as prices are at a premium for leisure and short term letting. Although property prices in established areas are higher than up and coming areas they are usually matched by higher volumes of visitors. Especially in Costa del Sol where the season is longer than everywhere, as a lot of golf players are coming all year round.
Less Hassle & Lower Running Costs
Generally speaking there is a good market for Buy to Let in most holiday areas in Spain France and Italy.
Capital Properties can assist the owners with local and international promotion meaning most of the potential client for the holiday rent can be reached from our advertising and marketing strategy.
We are also set up to offer Car Hire, Excursions, etc which they earn commission from, something a UK agent doesn't have the opportunity to do. We do the check in and check out processes, tried and trusted cleaning and laundry services. The whole ethos behind the tourist industry is to keep visitors coming back year after year as.
We are also set up to offer to the Customer management and accounting services at a competitive rate, so the property is let to its full potential, and hassle free rental.
Tourist Actractivity
Holiday Rental in many areas is almost 100% dependant on tourists, so the locations where many low cost airlines have the connection (like Malaga in Spain, Nice in France or Olbia in Sardinia) have much tourist traffic currently visiting that area and whether the visitor numbers growing.
Infrastructure is important as the general transport links like main roads, local airports & main rail lines. As also the sport plants, leisure structures, social life and amusing sites.
Local Legislation
Every market is different with its own laws, customs and economic data affecting property prices. It is lack of knowledge that creates the perception that overseas is a higher risk market. If you research the markets, and learn from the information you read, you can spot the next property hot spot.
Partnering with a company that understands overseas markets is a key way of gaining this information and making an informed choice. In summary it's easier to find investment property overseas than it currently is in the mature residential markets.
Buy a property for a holiday let and if you want to, you can also get the opportunity to use it yourself. The key to a successful overseas investment property is getting the country/region right and partnering with a company that understands that region.
Before you buy
- Define your priorities: are you looking to invest in an emerging area with potentially high capital growth or do you simply wish to cover your mortgage repayments with the rental income? Do you intend to retire to the property in the future?
- Look at your property through paying holidaymakers' eyes and keep standards suitably high to merit the rental you require.
- Gauge your potential rental market before you buy and ensure the property matches your markets' requirements.
- Make sure the location is right in terms of accessibility and proximity to local amenities as these issues will maximise rental potential.
- Remember that year-round tourist facilities will also increase rental opportunity, as will activities to suit all ages.
- Do your research/investigate the rental demand for your type of property in the area you are considering a purchase. Is the market likely to become saturated in the near future?
- If you wish to use the property for part of the year, calculate the amount of income you need to generate from it during the remaining time. A quick online search will allow you to identify the busy periods and average rentals achieved for similar properties in the area. Be aware also of school holidays from the British market when gauging your peak periods.
Any question? Simply contact our investor specialist at info@glamourhouses.eu
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