The Independent
From Albania to Argentina, it now seems nowhere is off-limits to the budding property mogul. By Zoe Dare Hall
There are few places left on the planet where the British house-hunter’s refrain “Bet you could buy a place here for next to nothing” does not ring through the air.
From former war zones (Libya, Bosnia) and long-haul havens (Thailand, Australia) to places we hadn’t even heard of a year ago (Cape Verde) and places we never wanted to hear about (Albania), the range of overseas destinations at which we are being invited to throw our money is limitless. So how do you choose?
Jonty and Alise Crossick seem well-qualified to answer that. Having turned £300,000 capital into £3.5m in 2003 by investing in 70 buy-to-let properties in the north of England, the married couple — who run property investment and development company Ready2Invest — bought apartments to rent out in Prague, Bulgaria’s Black Sea coast and Budapest. Using other investors’ money, they’ve since sold €200m worth of off-plan overseas property in a dozen countries.
Your appetite for risk is the key to a successful investment overseas, says Jonty Crossick, 38. “If you get very anxious about things, stick to less exciting but safer, more mature markets like Holland and Belgium. Alise and I are both willing to take risks and face uncertainty. We don’t get stressed, so we set ourselves ambitious goals of what we want to achieve financially.”
Although the idea of investing in an unknown, up-and-coming market such as Bulgaria might fill you with fear more than a familiar, tried and tested destinations such as Spain, the questions you need to ask are the same, insists Crossick.
“In any country, you need to know what to ask, who to ask and who to trust,” he says. “Are you paying the right price based on your comparable research? Who is your market when you want to rent or sell your property? And if you are told the property comes with a guaranteed rental, what does that mean exactly and who do you sue if you don’t get that rental?”
Avoid the common traps, Crossick adds, of thinking you have missed the boat and rushing in without having done sufficient research. Or asking so many questions that you are left too overwhelmed to make a decision.
“You won’t ever have 100 per cent of the information about a place,” he says. “At some point you have to make an informed decision and assess whether the return is worth the risk.”
So where should you put your money? “Montenegro, definitely,” says Crossick. “I also think there will be good capital growth in Turkey, India, Brazil and Morocco. Be careful of Spain. Like Britain, its market has peaked, but you can find some good stuff if you pick carefully.”
Emerging European Markets
The every-expanding EU has seen all sorts of unlikely destinations become investment hotspots and The Right Move Abroad deals with most of them, including Romania, Moldova and Macedonia.
“Bulgaria is our most popular destination because its capital, Sofia, is seeing huge corporate investment from the West,” says The Right Move Abroad’s Jeremy Casey. “Turkey is also catching up really fast and Slovakia is many people’s tip for 2007. You can expect far greater capital growth in Eastern Europe over the next few years compared to the West.”
Most of Casey’s clients are buying partly for investment, partly for holiday use, “which can be achieved for as little as £30,000 in most of the countries we deal with”, he adds.
Capital cities offer the surest investment in these emerging markets, as unlike beach or ski resorts, they do not depend on seasonal tourism.
“You will pay more for properties in a capital - £80,000 to £150,000 for a good-quality, off-plan apartment in Sofia — but you have good rental potential from the local business community. Always buy in the best location in any market, even if it means paying a bit more,” says Casey.
Finance may be difficult to arrange in emerging Eastern European markets, making leverage impossible, so be prepared to pay with cash. Always use a good, local lawyer — not a UK-based one — and always view the area before you commit.
With emerging markets, think about your exit strategy. Who will you sell to? And decide whether you are buying for pure investment or personal use. “If I had £100,000 to spend, I’d always put it into an Eastern European city — but wouldn’t necessarily want to holiday there,” says Casey.
Long-haul markets
A 14-hour flight is no deterrent for Brits seeking to capitalize on emerging distant markets such as Buenos Aires, Thailand or Mauritius, says Andrew Langton, chairman of Aylesford. “Long flights are not such a big deal if you own a home there. You’re not just going there for seven days.”
Langton tips the Argentinean capital, where he is marketing a new development of 200 apartments from around £200,000.
“All the demographics are looking great in that part of the world. Buenos Aires is a city that is becoming international for the first time. Its currency is dollar-driven so British buyers can take advantage of the strength of the pound over the dollar, and a lot of people are taking advantage of new markets that offer a sense of adventure.”
Now that foreigners can own a freehold title on the island, Mauritius is another new arrival on the overseas investor’s map, as is post-Tsunami Thailand. “It’s a long journey, but you try booking this Christmas and you won’t get a bed anywhere,” says Langton. “You can’t go wrong with the quality end of the market, such as Barama Bay, an 80-acre island that will be like a mini-Mustique, or the Royal Phuket Marina, a yacht-owner’s paradise.”
Keeping tabs on your property when it’s a day’s flight away can be tricky — unless you buy on a secure development with a management company to oversee maintenance and rental.
Also consider factors such as hurricanes, earthquakes and dubious dictatorships in far-flung locations. “These ecological points must be taken into consideration, as should the political situation,” says Langton.
Mature Markets
One in six of us wants to leave the country — and, of those, a quarter will buy in Spain, a fifth in France, and growing numbers in other “safe” markets such as Canada and Australia.
While emerging markets may be the place to make money, sunny easily accessible places where English is widely spoken such as Spain and Portugal are where we want to spend holidays and retire.
“Spain is renowned for its steady, long-term growth and it’s easy to get to with low-cost airlines,” says Chris Davies from Your Place Abroad, whose Spanish best-seller is Los Callados near Almeria, where two-bedroom apartments start at £103,000.
“We’re now seeing more end-users in Spain as there isn’t big money to be made from speculation there any more,” Davies adds. “Off-plan investors are going to the Eastern Algarve, where lots of golf courses are springing up.”
Since Channel 4’s A Place in the Sun tipped the Cabanas area of the Algarve as the European destination offering the best capital growth potential, Your Place Abroad has watched its apartments at Royal Cabanas Golf, whose next phase starts at £157,000 fly off the shelf.
Where British buyers often trip up in mature markets — Spain, in particular — is by being negligent, thinking they can save money by not hiring a lawyer to check such crucial issues as contracts or land ownership.
“You hear some horror stories in Spain about land grab and building issues, but as long as you use a lawyer, you can have a sound investment,” says Davies.
