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Debbie
Ward has spent more than 15 years
as a journalist, several as Features
Editor of Travel Trade Gazette.
She now works freelance.
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Buying
Property Abroad
Daltons Weekly
Buy to let and investment
There are certainly bargains to be had buying property abroad
but do you know how to spot a good investment opportunity, or
ensure you get the most from your buy-to-let? Check out our
advice below:
Seasonality
- making money year round
How reliant you will be on your rental property for income should
be a big factor in determining its location. Can you afford
to make profits on summer season rental alone? If not, then
you need to investigate the seasonality of the destinations
on your shortlist. Few places have year round beach-based tourism
but good sightseeing, shopping, or sports can draw more active
holidaymakers well into jumper and jacket weather.
Some regions, for instance those with ski resorts, have a different
draw in different seasons. In some cities you need not be reliant
on tourism at all as your property may be suitable for business
travellers.
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Year round sun
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Canaries, Florida, Cyprus.
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Summer sun, winters ski |
Northern Italy, Provence and Nice in France, Granada
in Spain.
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Business and tourism |
Major cities including Madrid, Barcelona, Athens, Paris,
Lisbon, Istanbul. |
Fickle fortunes
If you are entering the holiday let market you are entering
the tourism industry and you should be aware of its fickle nature.
Last year the fantastic July weather and World Cup on TV made
many people happy to stay at home, while bird flu and airport
security alerts made others too nervous to fly. Even household
name holiday companies suffered a fall in profits due to these
factors.
You need to have enough financial security to be able to ride
out such dips in the market yourself. Not being entirely reliant
on one season, or on tourists alone can help (see above).
Which kind of client?
When you are looking for a buy-to-let property ask yourself
what kind of client you expect to attract. It's no good hoping
to fill a large family home if you are in a region that appeals
mainly to couples, or a luxury pad somewhere favoured by backpackers
so do your homework. A flexible layout to your property may
also help. For instance, could the whole property be let to
a family one week and temporarily divided to suit two couples
the next?
Follow the flights
Every property investor is looking for the next big destination
so they can get in early and watch the value of their property
rise.
The boom in no-frills flights has opened up places previously
off the radar and made others more affordable by bringing competition
to the skies. It's worth keeping an eye on what's new for the
likes of Ryanair and easyJet. A word of warning however, budget
carriers operate on tight margins and a route could be pulled
as quickly as it's arrived. Be sure there's more than one airline
serving your location and the trend looks long term.
Also watch what major tour operators are up to. Bulgaria has
come out of nowhere to become a summer sun mainstay in the brochures
of Thomas Cook, Thomson etc. Private investors have already
spotted its potential and prices are on the rise. The next hot
spot? Like Bulgaria, Romania is also new to the EU, has a Black
Sea coast and cheap property. Its beaches haven't been brochured
by major UK tour operators since the 1980s but its worth keeping
an eye on.
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No-frills success stories |
Nice, Carcassone, Prague, Stockholm, Krakow, Budapest,
Riga, Tallinn.
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New no-frills routes |
Malta, Marrakech.
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Growth in tour operator coverage |
Bulgaria, Croatia, Cape Verde islands. |
World events and regeneration
Liverpool is being regenerated for its role as next year's European
Capital of Culture and London's East End for the Olympics in
2012. Look out for similar projects abroad as infrastructure
improvement invariably causes property values to rise.
However, be sure to check local government plans for the bigger
picture - could someone build in front of your beachfront property?
Could your great view be obscured by a tower block?
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Infrastructure developments |
Valencia in Spain is being regenerated for its role
this year as host to the America's Cup; Sicily has received
government investment; Dubai is experiencing a huge building
boom. |
Armchair research
TV property shows abound so watch as many as you can to help
get a feel for the market. Channel 4's A Place in the Sun starts
a new series on March 1.
Among places it is tipping for 2007 are Italy's Western Liguria
¬as a cheaper alternative to Umbria and Tuscany; The relatively
undiscovered Silver Coast of Portugal between Lisbon and Oporto;
Sicily; and Croatia's lesser known neighbour Montenegro.
Further information
No frills airlines: www.ryanair.com,
www.easyjet.com,
www.flymonarch.com,
www.flybe.com
www.channel4.com/4homes,
website of the TV property show
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