This week I have chosen my current top 5 investments that I believe all offer great value in different ways to investors. They range from financed low-deposit villas to properties with long-term rental guarantees. All of them can be found in our lists of investment properties.
My top 5 property investments
An amazing offer in the Dominican Republic; buy a villa and get a free apartment!
Five years rental guarantee on Crete at an average 5% Net
Only £1000 deposit secures an island villa in Thailand
Great rental condos for under £100k near Disney World in Cane Island, Florida
Beach-side apartments for under £38k in North Eastern Brazil
Time to look overseas for property investments?
Making shrewd investments in tougher markets is the secret to the success enjoyed by many in the past. This doesn’t mean always calling the bottom or top of a market accurately – such strategies are inherently risky – it means recognising that value can be at its most affordable when market participants are most willing to do deals to move stock. By investing when others are reticent and prices are depressed an investor can see far greater value enhancement than trying to buy when sellers have the upper hand. As an example, one only has to look at the performance of the stock market (measured as the FTSE 100 in this instance) since 2003 to see that a canny investor who had invested just after the market had plummeted from its late 1990’s peaks would have made a tidy return.
Source: FT.com
The UK property market looks set for a long period of stagnation and maybe even prolonged downward pressure and I’m not the only one sitting in this camp:
‘Mr Slade, a well-known property figure who started in the business in 1967, said “we’ve all been here before and we will find a way through this better than the others”.
But he predicted it would be the end of 2009 “before we see any stability in the investment market” and there would be little or no rental growth before 2011.’ (Source: FT).
So where should serious investors look to put their money? After all, failing to invest can be almost as disastrous as investing in the wrong place or at the wrong time.
There are some serious alternatives available today that any self-respecting investor should be looking at:
Dominican Republic – get two properties for the price of one!
A lot could be said of the opportunity The Dominican Republic offers the investor – high and growing tourism; developing infrastructure; low hurricane risk; and scenery and facilities guaranteed to bring in more visitors every year.
So why not take this once-in-a-lifetime offer (available for only the first few buyers) to get a FREE apartment with every villa purchased on La Colonia, a 5-star resort with its own private beach and all the amenities you would expect.
The real benefit of this offer is that those lucky few who buy on these terms will have TWO rental streams from their properties here – a much better proposition than a simple discount on the price or a time-constrained rental guarantee. All this and:
• $2,000 reservation fee
• 30% Deposit
• 70% Mortgage available (subject to status)
• Free lifetime membership of Golf Course included (first 35 villas sold, non-transferable)
• Free lifetime green fees (first 35 villas sold, non-transferable)
• Free golf buggy (first 35 villas sold)
• Project governed by Stewart Title, the gold standard in title insurance and escrow arrangements
Crete – get a rental guarantee for up to 5 years on this popular island destination
LOW PRICES, EXCELLENT CAPITAL GROWTH, 5 YEAR GUARANTEED RENTAL AND NO MORTGAGE PAYMENT FOR A YEAR AFTER COMPLETION!!
Crete is another of those popular destinations with too few properties to rent of the quality sought by holiday-makers. Most of the properties on the island seem to hail from the distant past and new ones being built tend not to be on resorts with suitable facilities.
The apartments are 1 or 2 bedrooms, and each block has its own pool. Pricing is inclusive of VAT, furniture pack, EOT license. The developer guarantees rent for 5 (yes, five) years at 3% net for the first year, then 4%, 5%, 6% and 7%. The owner is also allowed to personal use for 4 weeks a year (2 in summer, and 2 in winter).
To reserve a unit, you put down a 1500 Euro reservation fee, plus a 1500 Euro admin fee (which covers brokerage fees, admin fees, and snagging fees).
Contracts are prepared (preliminary sales agreement) and when these are signed 30 – 60 days you pay over the full deposit (20% of purchase price less the 1500 Euro reservation).
The property possession is then taken end February 2010. The bank package allows a 1-year grace period, where you do not need to pay any installments unless you wish to. We have available full financial sheets for each of the apartments to show you exact cash-flow projections.
For the next 5 years the property is rented out, maintained by the developer, who returns it to the purchaser at the end of this period in an as new condition (developer is responsible to repair all damages, paint, etc except the furniture which is subject to wear and tear).
Thailand – buy a property on a managed resort for only £1,000 down
A reservation fee of £1,000 gets you one of these spectacular villas in Thailand on a 5-star resort with full amenities right on the beach. The 30% deposit needs to be paid within 45 days but then the properties have a guaranteed 70% mortgage (subject to status) for the balance at completion. What’s more, during the first two years owners receive a 10% guaranteed rental and a 50:50 share of all rentals after then.
Moreover, the developer will service the payments on the 30% deposit during the build phase! These amounts are then added to the final price paid but the 70% mortgage is based on the value at completion which can have the effect of providing sufficient funding to repay the initial deposit and accrued payments.
For those needing assistance finding the 30% deposit there may be assistance available from contacts at Overseas Property Centres and/or from the developer – ask us for more details.
For those seeking to build a portfolio of overseas properties these are an ideal first rung. By using the capital appreciation between now and completion to invest in two or more properties in, say, a couple of years and repeating the exercise with those it is quite feasible to see how a significant portfolio can be built within a decade. All, effectively, for £1,000 upfront!
Florida – low prices, excellent value and good long-term rental potential
With the dollar at its lowest level for nearly a quarter of a century, US house prices at or close to their anticipated nadir and US citizens finding credit about as easy to come by as rocking-horse droppings now is the time to get a classic residence near to all the attractions. With over 52m visitors each year and tight controls on which properties can be let to tourists Florida represents excellent value for money at the moment.
These new condos only 5 minutes from Disney and right near some of the best local golf courses should prove to be of enduring attraction for visitors to the area. With swimming pools, a lake and a huge clubhouse on site everything has been designed with the holidaymaker in mind – and a 2 bedroom condo costs less than £100,000 at current exchange rates.
Value like this will not be seen again for some time and, if the President and the Governor of the Fed have their way, the dollar will not fall from where it is at present. Exchange rates can be expected to rise rather than fall further – if the dollar rises from its current level of around $1:95 to the £sterling and reaches, say, $1:80 a $200,000 property would increase in value (or price) by around £9,000!
Brazil – a land of real promise
Brazil is changing rapidly and is expected to be one of the super economies of the next few decades, along with Russia, China and India. Oil appears to be abundant and new fields are being discovered every day, it seems. Getting in on the ground floor of the growth that is clearly coming has already attracted huge numbers of investors yet the prices of apartments, villas and land plots remain keen and affordable.
Have a look at these investment apartments in Brazil, right on the beach on the north-east coast, close to planned golf courses, beaches and much more. These are ideal investment properties as rentals should be easy to achieve given the facilities on the development and nearby, the beachside location and the high standard of the buildings. All this for as little as £37,950.
As you can see, there are plenty of great investment property options well beyond the shores of the UK and where prices can be expected, with good, valid reasons, to increase in value over the coming few years.
Chris Metalle, Director Overseas Property World Ltd.
