Buy to Let Abroad? Show Me the Tenants!
Lots of vendors of overseas property just love to talk about all the capital growth their investors will get. And that's fine.
But remember, when they say property prices have already gone up by X% or wil go up by Y%, who is saying that?
Is it a valuer the developer likes?
Or have properties actually really sold for those higher prices.
You see, the problem is in many countries is that it's really hard to nail down what something is worth because the number of comparable transactions are so much smaller than in the UK.
Also, rental yields in many parts of the new Europe for example are really low - so you may have to fund the investment heavily until you see those capital gains come through.
The reality is that in many emerging economies, personal incomes are still very low so people cannot afford to pay much in rent, plus the number of people renting is pretty small too, so you may also get long void periods.
And as you are in another country, agency and property maintenance fees will likely be higher for you, Mr. Foreigner too.
The message is don't be too bamboozled by vendors claims of big property growth figures. Factor in the low rents and ask them where are the tenants who will fill my property and what can these tenants actually afford to pay!
Back to site: www.lettingfocus.com
PS I'd be interested in hearing from people who have bought abroad and are suffering big void periods and low rental yields plus, of course, those who have done well too.
Copyright: David Lawrenson
But remember, when they say property prices have already gone up by X% or wil go up by Y%, who is saying that?
Is it a valuer the developer likes?
Or have properties actually really sold for those higher prices.
You see, the problem is in many countries is that it's really hard to nail down what something is worth because the number of comparable transactions are so much smaller than in the UK.
Also, rental yields in many parts of the new Europe for example are really low - so you may have to fund the investment heavily until you see those capital gains come through.
The reality is that in many emerging economies, personal incomes are still very low so people cannot afford to pay much in rent, plus the number of people renting is pretty small too, so you may also get long void periods.
And as you are in another country, agency and property maintenance fees will likely be higher for you, Mr. Foreigner too.
The message is don't be too bamboozled by vendors claims of big property growth figures. Factor in the low rents and ask them where are the tenants who will fill my property and what can these tenants actually afford to pay!
Back to site: www.lettingfocus.com
PS I'd be interested in hearing from people who have bought abroad and are suffering big void periods and low rental yields plus, of course, those who have done well too.
Copyright: David Lawrenson
This entry was posted by lettingfocus, on
Friday, January 26, 2007.
