International property investment is a hot topic right now, with investors increasingly looking to destinations overseas as a way of growing their available cash – but international property investment needs to be looked into with great care, to decide if it’s right for you, and to select the right market to invest in.
Set up a comparison with the home market
The first question to ask, once you’ve decided on how much you are prepared to allocate to the investment, is how much you’d be making if you allocated your money to the home market? Take a look at the property hotspots – London, Manchester, Brighton – and see what the markets are doing there, and whether your finances extend to a suitable property. Make a list of those you could afford, how many bedrooms each has, what the rental market is like in your chosen city, and critically, what the annual return is likely to be.
It really is critical to have this baseline to start from before you consider international property investment, so it’s important to make sure this research is properly done. Once the domestic comparison is completed, you’re ready to take your first long hard look at whether international property investment is right for you.
Go bold, step carefully
The first advice must be cautionary. This is an international property investment, not a property for yourself. Don’t fall in love with something that is character-filled, but also filled with with pitfalls. Discard any property, and any location, which is unsound. New-build is always going to be easier both to rent out and to maintain. Locations with a stable political and economic history are likely to provide a stable platform for maximum returns on your international property investment.
With this in mind, you can start making a list of possible locations for your potential international property investment. Think about it hard – remember you’re going to be managing returns on a property that is hundreds, possibly thousands, of miles away. How often will you need to visit? Are there established agents who can look after your property for you? Will having a property abroad simply create anxiety – or is choosing an international property investment going to free up your money to grow much faster than at home?
While it’s good to be cautious, it also pays to be bold. This advice on international property investment, is not the contradiction that it at first appears. You might want to choose a destination that’s new to the international travel scene, like North Cyprus for instance. Prices are still low, its politics are increasingly stable – and more and more vacations are being taken there because of its unspoilt coastline and round-the-year sunshine.
The more traditional market of Spain has had a tough time of it through the economic crisis, but it may be that you will consider an international property investment there, precisely because prices are now so low, compared to the boom years. Eastern European countries, like Romania and Bulgaria, are perhaps best avoided until their potential – and their stability – is a little clearer.
Morocco in north Africa has exploded as a destination for international property investment since the onset of budget flights to this year-round holiday destination. You may be concerned about recent political events – but there’s no doubt that its appeal will remain.
In the United States, Florida is always going to be an attractive choice for your international property investment shortlist. You’ll have to consider whether you want an investment so far from home, and on a time zone that makes managing your investment a matter of calling at difficult hours.
Once you have a list of possible places that you’d consider, do research into each, in just the same way as you did your research on the home market. What’s the size of property your money will buy? What’s the return going to be? And perhaps most important of all: is there a managing agency infrastructure that will cheaply and easily look after your property for you?
It’s time then to compare your international property investment list with the domestic list. Be hard-nosed: the bottom-line figures never lie.
International property investment is a big step. There is no doubt, though, that properly considered, international property investment can be financially rewarding, provided you’ve make sure that this investment is the right strategy for you.
Nigel Walters is a skilled author, using his writing to help guide people in the right direction when it comes to either property or investments. He has done articles for a number of websites such as Innovo property investment.