What is the truth behind Fly to Let
It’s no secret much of the basis of mainstream overseas property news these days often comes from the mouth or PR machines of developers and agents, not necessarily a bad thing given that many of these people are in a good position being on the ground to know what’s actually happening within an overseas property market place on a day to day basis. The ambiguity comes into play when these releases make it into tabloids as a hot property tip which, based on their faith in the authority of where it’s written some buyers may then proceed to buy property there.
There’s no doubt about it property abroad continues to be a booming market but what remains unclear is the market breakdown of “short term investors” who flip for profit on capital gains, “long-term investors” who are aiming to achieving profitable rental yields and capital appreciation, “second home owners” who have bought as an investment for the future and everyone in between. I suspect the actual figures would make very interesting reading indeed considering figures according to the Office of the Deputy Prime Minister estimate 254,000 Britons now own homes abroad and 73,000 of those are let out.
As part of our second season of podcasts we are looking to get to the bottom of market hype and find out what is really going on in some of the international property scene’s major hotspots.
This week we take a look at the phenomenon behind “fly-to-let” which takes the concept of buy-to-let and applies beyond domestic property borders. In the face of rising UK house prices stacked against higher property yields in real estate markets abroad, many property buyers have indeed taken the plunge investing in a fly-to-let property but we’d like to know just how successful it’s been.
We would like to hear from anyone who has bought a property abroad with the aim of renting it out.
Has it been proved to be a worthwhile investment so far?
Does it cover its costs?
Do you make a return?
What have been the positives and negatives of your fly-to-let?
Alternatively, are you actively in the market looking to buy a property to achieve rental returns?
Which countries/areas are you looking at?
What are your main concerns?
What rate of return would you be happy to achieve?
Just simply click here to leave your fly to let story.
Kevin said,
February 28, 2007 @ 8:53 am
am loking for property in the ukraine my concerns are gettin the corect market value (prices seem to rise when i show an interest) and the legal ownership of the property, i am still looking for a lawyer that speaks english.
i am looking in the Odessa area
Regards
Kevin Lee
richard chapman said,
February 28, 2007 @ 10:15 am
I bought in Northern Morocco (2 appartments) and having paid less than £50k each expect returns in the 5-10% catagory and already seeing 50% gains on capital.
Morocco is close to Spain and has great weather and the culture and very welcoming people.
Even Easyjet and Ryan Air have just arrived which begins to make the potetial more achievable.
Also own a house in France since 1999, which was the original overseas market and made great gains there too.
Richard Chapman
richard said,
February 28, 2007 @ 11:13 am
I started in UK B2L in the mid ninties, howver by 2003 I started to buy abroad attracted by higher yields but more particularly greater ‘upside’, by which I mean entering immature or under valued markets which had the potential that the UK had say in 1995 following its deflationary period.
Great Exuma in the Bahammas was my first target and here ‘prime’ property has more than trebled in value since 2003. The trick was to only buy ocean front properrty, not affected by tidal surge and that had utilities already connected or likely to be connected. Some property values have increased by a factor of 5 in this time whereas some have barely moved in value at all.
Next came Germany. I invested in Berlin as I noticed manky US and UK hedge funds were sinking billions into property there. Yields were 10% but now 6% is the norm. I expect considerable capital growth as Europes newest capital in the worlds most sucessful exporting nation takes off. Mortgages are about to become deregulated so the masses there will have the opportunity to buy. Note prices have fallen over the last few years just as Londons did from 1988 - 1994. As Warren Buffett says ‘the best time to buy is when no one else is’
Unemployment in East Germany is at last falling, indeed Dresden now has lower unemployment than Cologne (3.1%).
I see Berlin as the gateway to Eastern Europe and a very funky happening scene is unfolding.
Next came Morocco. For me this is the best investment location. This is not another Bulgaria. Billions are pouring in from the worlds biggest developers, many out of Dubai. Huge Spannish developers are also involved as well as Americans and companies such as those behind the ‘Sandals’ and ‘Sun City’ brands. Even the Bransons have opened here.
WHY? Take a look at a map. S Spain virtually kisses Morocco. The season is long, its exotic and crucially the Government have gone to great legnths to get it right.
The best investments are the Government backed ‘Plan Azure’ mega resorts. I invested in the flagship called ‘Meditteranea Saidia’. Many named Premiership footballers investing here as the sports village surpases anything in Spain. The facilities are immense and include the Meds biggest most modern marina, 3 championship golf courses all set on a beach (in Spain the prices would be 4 x higher).
There will be 11 on - site hotels giving owners free year round marketing as well as many on site rental agents BUT PRIVATE PROPERTY IS RESTRICTED TO 3000 UNTIS AND NO MORE IS ALLOWED FOR 15 YEARS.
There will be 500 designer shops, 17 club houses a hospital, helipads, Olympic swimming zone, water parks…the list is endless.
This is an ‘off plan’ play as my property wont be finnished until end of 2009.
I expect the yield to be 15%+ given the association with many UK footbalers. Note they dont just endorse the project, many have bought here.
I expect prices to double within 4 years and treble within 7. I paid £170000 for a detatched villa with own pool, Mobila kitchen etc. Everything will be fully managed.
I looked at places in Spain such as Pollaris world, but beleive me there is just no comparison.
I think Morocco is the nect Dubai (but low rise only) yet ONLY 3 HOUR FLIGHT!
I now seek a new prospect, either another Morocco or perhaps the Caribean or Slovenia.
The bottom line for me is to maximise returns rather than take the lazy route.
richard said,
February 28, 2007 @ 11:20 am
By the way I fogot to say, Bulgariarian seaside property has a 2 month season, Meditteranean Morocco is year round especially if you buy on a Plan Azure resort as the ‘Centreparcs’ factor comes into play: IE, Give people enough facilities and theyll come what ever the weather.
So Bulgaria, 2 months, Morocco 12 months….. mmmmm