Hi,Hope you are well.
What to Target When Buying Abroad. When you look to buy abroad it should always be for a clear reason – with the clear idea to get a higher return on your capital than you would get in your local or national area. Right now there are some countries growing at a far greater rate economically than the UK – and there are some outstanding opportunities for property investors, but there are also plenty of potential pitfalls for investors to watch out for. I am just back from Poland where we have just wrapped up a phenomenal deal, in a city with a massive shortfall of property and a booming economy with leading banks, car manufacturers and universities all present. I am a big believer in investing in areas showing strong economic growth – but most importantly, as anyone attending our workshops will know I always look for local affordability whether in the UK or Overseas. Clearly leverage and buying costs are critical to your return on investment, but equally, when looking at any deal – I always ask – is the property affordable to the local market at current prices – and most importantly will it be if the price rises by 50%? Why is this important – well it should be clear that if you are looking to buy a property with the hope that it will rise in price, there will need to be someone to buy it at the new, higher price. This for me rules out buying in around 80% of the UK right now, and definitely in Ireland as prices are way above local affordability levels – however there are still some areas that show strong local affordability based on local salaries and house prices – and that have plenty of room to rise by up to 50%. For example if I can buy a 3 bed semi detached property in the UK for say £85,000 I am very confident in that price – and the potential for it to rise by up to 50% due to local affordability. The average salaries in the UK are £20,000 – so for a couple living together earning even £30,000 – they can afford to pay up to around £140,000. Vice versa, buying a 2 bed apartment for £200,000 does not appear as attractive as local affordability is not apparent on the whole, and it is harder to justify potential capital growth. I would use exactly the same rules when looking overseas – can the locals buy now, and can they if prices rise by 50%? We have just secured a deal in Wroclaw in Poland where 70% of the development has been bought by the local market at the same prices and higher than we have secured for our investors. Can they afford to buy if prices rise by 50% over the next 3-5 years? You bet, there is a massive shortfall of housing, and salaries are rising by 10% per annum, and as with many of the emerging European markets, the mortgage market is only just opening up – and the locals generally have large amounts of equity in their homes as mortgages have not previously been readily available. It is important in my opinion to buy where locals buy to ensure the area is maintained well, and kept desirable but to also give a clear exit strategy. Many people however when looking overseas, while they are attracted to the clear economic reasons for buying in these countries, end up buying the wrong type of property ie they may buy a holiday home, and target the holiday market for tenants. This is a generalisation clearly and there will always be exceptions but if you buy in Spain or Bulgaria and are targeting the UK holiday market – then you are not really investing in the Spanish or Bulgarian economy doing well. You are more reliant on the UK economy and disposable incomes here than the Bulgarian one. For me the whole point of investing in an emerging market is to gain from the gains that the local economy will experience – and for this it is best to target the cities where most investment will be seen, just as in this country rather than a coastal area reliant on overseas investors. Targeting where the local population go on holiday can work, although I would still rather go for longer term tenants. A big mistake here is in investors buying a property they think they would like to enjoy themselves, or on a golf course that they can imagine spending time at. If you are looking for a holiday home for yourself this is fine, or are keen to combine a holiday home, with some rental income be clear when are choosing your property. However if you are looking for purely an investment – this should not even come into it – I have got no interest in staying in any investment property I buy! For me it is a big risk to buy for example a Gary Player designed golf course in an emerging market with no strong golfing background. Why? Because the season may be short, you may have to work far harder for tenants, and there may be no obvious strong reasons for capital growth. I would much prefer buying in either a capital city, or a secondary city seeing huge investment from multi national companies, with a large number of local buyers -especially with many of the emerging countries in Europe where there are huge shortages of modern suitable housing for a young, vibrant population. While there will always be exceptions, and we will recommend a few if the figures work well, I would always say a far better and safer investment would be buying where there is strong local affordability and local ownership. If you look at markets around the world that have shown signs of becoming a bubble it is usually driven by investors or speculators with not enough local buyers to support this – eg Costa del Sol, Sunny Beach, Orlando, several city centres in the UK that have seen large numbers of apartments spring up. So in conclusion, I would always look for local affordability and local ownership when making an investment – as this can make a significant difference to your return on investment and capital growth. Right now many of the capital cities, and even more some of the 2nd and 3rd largest cities in the new EU countries are showing excellent growth and excellent economic reasons to continue to grow over the next 5 years – for me these are well worth looking at closely. If look at this alongside leverage options and buying costs you can do very well with returns as high as 100% per annum. Have a great week with all your investments,
Regards Aubrey Wilson.
Full Version: What To Look For When Overseas Investing
QUOTE(tw104419 @ Aug 21 2007, 01:04 PM) 
Hi,Hope you are well.
What to Target When Buying Abroad. When you look to buy abroad it should always be for a clear reason – with the clear idea to get a higher return on your capital than you would get in your local or national area. Right now there are some countries growing at a far greater rate economically than the UK – and there are some outstanding opportunities for property investors, but there are also plenty of potential pitfalls for investors to watch out for. I am just back from Poland where we have just wrapped up a phenomenal deal, in a city with a massive shortfall of property and a booming economy with leading banks, car manufacturers and universities all present. I am a big believer in investing in areas showing strong economic growth – but most importantly, as anyone attending our workshops will know I always look for local affordability whether in the UK or Overseas. Clearly leverage and buying costs are critical to your return on investment, but equally, when looking at any deal – I always ask – is the property affordable to the local market at current prices – and most importantly will it be if the price rises by 50%? Why is this important – well it should be clear that if you are looking to buy a property with the hope that it will rise in price, there will need to be someone to buy it at the new, higher price. This for me rules out buying in around 80% of the UK right now, and definitely in Ireland as prices are way above local affordability levels – however there are still some areas that show strong local affordability based on local salaries and house prices – and that have plenty of room to rise by up to 50%. For example if I can buy a 3 bed semi detached property in the UK for say £85,000 I am very confident in that price – and the potential for it to rise by up to 50% due to local affordability. The average salaries in the UK are £20,000 – so for a couple living together earning even £30,000 – they can afford to pay up to around £140,000. Vice versa, buying a 2 bed apartment for £200,000 does not appear as attractive as local affordability is not apparent on the whole, and it is harder to justify potential capital growth. I would use exactly the same rules when looking overseas – can the locals buy now, and can they if prices rise by 50%? We have just secured a deal in Wroclaw in Poland where 70% of the development has been bought by the local market at the same prices and higher than we have secured for our investors. Can they afford to buy if prices rise by 50% over the next 3-5 years? You bet, there is a massive shortfall of housing, and salaries are rising by 10% per annum, and as with many of the emerging European markets, the mortgage market is only just opening up – and the locals generally have large amounts of equity in their homes as mortgages have not previously been readily available. It is important in my opinion to buy where locals buy to ensure the area is maintained well, and kept desirable but to also give a clear exit strategy. Many people however when looking overseas, while they are attracted to the clear economic reasons for buying in these countries, end up buying the wrong type of property ie they may buy a holiday home, and target the holiday market for tenants. This is a generalisation clearly and there will always be exceptions but if you buy in Spain or Bulgaria and are targeting the UK holiday market – then you are not really investing in the Spanish or Bulgarian economy doing well. You are more reliant on the UK economy and disposable incomes here than the Bulgarian one. For me the whole point of investing in an emerging market is to gain from the gains that the local economy will experience – and for this it is best to target the cities where most investment will be seen, just as in this country rather than a coastal area reliant on overseas investors. Targeting where the local population go on holiday can work, although I would still rather go for longer term tenants. A big mistake here is in investors buying a property they think they would like to enjoy themselves, or on a golf course that they can imagine spending time at. If you are looking for a holiday home for yourself this is fine, or are keen to combine a holiday home, with some rental income be clear when are choosing your property. However if you are looking for purely an investment – this should not even come into it – I have got no interest in staying in any investment property I buy! For me it is a big risk to buy for example a Gary Player designed golf course in an emerging market with no strong golfing background. Why? Because the season may be short, you may have to work far harder for tenants, and there may be no obvious strong reasons for capital growth. I would much prefer buying in either a capital city, or a secondary city seeing huge investment from multi national companies, with a large number of local buyers -especially with many of the emerging countries in Europe where there are huge shortages of modern suitable housing for a young, vibrant population. While there will always be exceptions, and we will recommend a few if the figures work well, I would always say a far better and safer investment would be buying where there is strong local affordability and local ownership. If you look at markets around the world that have shown signs of becoming a bubble it is usually driven by investors or speculators with not enough local buyers to support this – eg Costa del Sol, Sunny Beach, Orlando, several city centres in the UK that have seen large numbers of apartments spring up. So in conclusion, I would always look for local affordability and local ownership when making an investment – as this can make a significant difference to your return on investment and capital growth. Right now many of the capital cities, and even more some of the 2nd and 3rd largest cities in the new EU countries are showing excellent growth and excellent economic reasons to continue to grow over the next 5 years – for me these are well worth looking at closely. If look at this alongside leverage options and buying costs you can do very well with returns as high as 100% per annum. Have a great week with all your investments,
Regards Aubrey Wilson.
What to Target When Buying Abroad. When you look to buy abroad it should always be for a clear reason – with the clear idea to get a higher return on your capital than you would get in your local or national area. Right now there are some countries growing at a far greater rate economically than the UK – and there are some outstanding opportunities for property investors, but there are also plenty of potential pitfalls for investors to watch out for. I am just back from Poland where we have just wrapped up a phenomenal deal, in a city with a massive shortfall of property and a booming economy with leading banks, car manufacturers and universities all present. I am a big believer in investing in areas showing strong economic growth – but most importantly, as anyone attending our workshops will know I always look for local affordability whether in the UK or Overseas. Clearly leverage and buying costs are critical to your return on investment, but equally, when looking at any deal – I always ask – is the property affordable to the local market at current prices – and most importantly will it be if the price rises by 50%? Why is this important – well it should be clear that if you are looking to buy a property with the hope that it will rise in price, there will need to be someone to buy it at the new, higher price. This for me rules out buying in around 80% of the UK right now, and definitely in Ireland as prices are way above local affordability levels – however there are still some areas that show strong local affordability based on local salaries and house prices – and that have plenty of room to rise by up to 50%. For example if I can buy a 3 bed semi detached property in the UK for say £85,000 I am very confident in that price – and the potential for it to rise by up to 50% due to local affordability. The average salaries in the UK are £20,000 – so for a couple living together earning even £30,000 – they can afford to pay up to around £140,000. Vice versa, buying a 2 bed apartment for £200,000 does not appear as attractive as local affordability is not apparent on the whole, and it is harder to justify potential capital growth. I would use exactly the same rules when looking overseas – can the locals buy now, and can they if prices rise by 50%? We have just secured a deal in Wroclaw in Poland where 70% of the development has been bought by the local market at the same prices and higher than we have secured for our investors. Can they afford to buy if prices rise by 50% over the next 3-5 years? You bet, there is a massive shortfall of housing, and salaries are rising by 10% per annum, and as with many of the emerging European markets, the mortgage market is only just opening up – and the locals generally have large amounts of equity in their homes as mortgages have not previously been readily available. It is important in my opinion to buy where locals buy to ensure the area is maintained well, and kept desirable but to also give a clear exit strategy. Many people however when looking overseas, while they are attracted to the clear economic reasons for buying in these countries, end up buying the wrong type of property ie they may buy a holiday home, and target the holiday market for tenants. This is a generalisation clearly and there will always be exceptions but if you buy in Spain or Bulgaria and are targeting the UK holiday market – then you are not really investing in the Spanish or Bulgarian economy doing well. You are more reliant on the UK economy and disposable incomes here than the Bulgarian one. For me the whole point of investing in an emerging market is to gain from the gains that the local economy will experience – and for this it is best to target the cities where most investment will be seen, just as in this country rather than a coastal area reliant on overseas investors. Targeting where the local population go on holiday can work, although I would still rather go for longer term tenants. A big mistake here is in investors buying a property they think they would like to enjoy themselves, or on a golf course that they can imagine spending time at. If you are looking for a holiday home for yourself this is fine, or are keen to combine a holiday home, with some rental income be clear when are choosing your property. However if you are looking for purely an investment – this should not even come into it – I have got no interest in staying in any investment property I buy! For me it is a big risk to buy for example a Gary Player designed golf course in an emerging market with no strong golfing background. Why? Because the season may be short, you may have to work far harder for tenants, and there may be no obvious strong reasons for capital growth. I would much prefer buying in either a capital city, or a secondary city seeing huge investment from multi national companies, with a large number of local buyers -especially with many of the emerging countries in Europe where there are huge shortages of modern suitable housing for a young, vibrant population. While there will always be exceptions, and we will recommend a few if the figures work well, I would always say a far better and safer investment would be buying where there is strong local affordability and local ownership. If you look at markets around the world that have shown signs of becoming a bubble it is usually driven by investors or speculators with not enough local buyers to support this – eg Costa del Sol, Sunny Beach, Orlando, several city centres in the UK that have seen large numbers of apartments spring up. So in conclusion, I would always look for local affordability and local ownership when making an investment – as this can make a significant difference to your return on investment and capital growth. Right now many of the capital cities, and even more some of the 2nd and 3rd largest cities in the new EU countries are showing excellent growth and excellent economic reasons to continue to grow over the next 5 years – for me these are well worth looking at closely. If look at this alongside leverage options and buying costs you can do very well with returns as high as 100% per annum. Have a great week with all your investments,
Regards Aubrey Wilson.
Can you summarize your message? Who do you think has time to read the full novel?
QUOTE(catara @ Aug 21 2007, 05:57 PM)
Can you summarize your message? Who do you think has time to read the full novel?
I think they're ramping the Polish property market, if you don't buy now you'll never be able to afford it, prices will rise by 5 gazillion percent over the next 5 years...
Aubrey, I lost the will to live half way through this your first post, I would hate to be in on one of your workshops!!!
So it wasn't just me then !. Even speed reading I lost interest.
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