Since the Spanish property boom of the late 80s and early 90s, many people have been on the look-out for a holiday home in the sun. The problem is that people don’t become investment property specialists overnight. Effective property investment requires much more than luck, it requires an ability to calculate risks, estimate growth and return.
So how does one visualise a balance sheet weighing up expenses against income? You must take factors such as decor into account because at some point you will need to be able to sell on at a profit to someone. Look at every aspect of the investment, weigh up the pros and cons, the profit and loss, the income and expenditure. No investment is without its weaknesses, but you must be able to evaluate these so that you can make a calculated judgement.
The most successful investors will only view the property for a few minutes before deciding to proceed. The reason is that they had already satisfied 95 per cent of their requirements through extensive research before visiting.
So, where to buy? This is the question that everyone asks. The truth is, there is no one single location or country but there are a range of countries which offer different pros and cons.
Below are some tips on how to decide on which country and location to invest in...
Tourism. This is the key market driver in many markets. Every country has large cities, but not all have impressive golf courses, ski slopes, and beautiful coastlines. We recommend you choose a location which has wider appeal. Also, bear in mind that some countries have longer tourism seasons than others.
Growth. What is likely to happen in the next five or ten years that could have a positive or negative effect on the property? War and political conflict can lead to widespread uncertainty and will cause property prices to fall. On the other hand, EU accession, Olympic bids, the hosting major events or new exciting tourist attractions will lead to increased infrastructure investment and therefore higher property prices. It is important to look at the country as a whole. Look at the economy as a whole? Is there room for future growth?
Budget. Many people believe that location is the most important aspect of property purchase. However, if you can’t afford a property, then there’s certainly no use looking at it. If a location offers lower priced property, it opens up the market to other buyers who may want to buy with the small amount of equity they have in their current residence.
Rationale. It can be difficult to accurately predict the level of money that will come in from your rental income. People should only invest in emerging markets in order to appreciate their capital, not for just looking for short term gain.
Location. Every country has good and bad areas to invest in. Buying a house 20 miles from the coast just because it’s cheaper is not necessarily a good investment. You need to be able to sell it on, and it must have appeal to a wider audience.
Property investment is one of the safest and most profitable ways of making money.
If you are interested in investment property please email us with your questions at marketing@efs.com.my
