Fly Cheap, Will Buy

With every Tom, Dick and Harriet jumping aboard the international property investment bandwagon these days, it pays to have a certain strategy in mind when analysing the pros and cons of where, when and how to buy. Should a cheap flight be in the forefront of your mind?

How many potential investors do you reckon out there, whose only experience of an emerging market bricks and mortar investment has been to drool over the rather lovely Ms Lamb heralding the merits of a sweetshop of equally lovely places in the sun, and then hop onto Rightmove, can really claim to know what they are doing? Hunches and instincts are one thing, but hard facts are another, there is no inside track and risks are high. However, research published across the industry has shown that novice and experienced investors alike can actually rely upon certain factors when structuring their property portfolio. Chief amongst these is the accessibility and price of travel to their dream destination and not necessarily what it is now, but what it will be like in the short to medium term.

The boom in the budget airline industry has had a direct and profound effect on capital gain and rental yield in certain markets, illustrated by hard fact, a prime example being in the Bulgarian market where, three months after carriers easyJet and Ryanair announced new schedules to the country’s ski and coastal resorts, property prices had leapt and sales had topped €310 million within the first 90 days of 2007. Other destinations are reporting similar market activity, with higher numbers of cheap flights to Cyprus resulting in increased interest in the Cypriot property market as a whole, necessitating the immediate expansion of Paphos and Larnaca airports. Morocco’s drive to become the short haul tourist destination of choice knows no bounds and market activity is thriving following the announcement of an additional 20 routes into the country within the next 5 years. Additionally, South America is reaping the rewards of Thomson Fly’s new, cheap routing across the region.

This month’s Conde Nast Traveller Readers’ Travel Awards saw easyJet scooping the prize for best low cost airline, with over 80% of the vote, while Ryanair toots its horn as being the world’s most popular airline in terms of official international passenger numbers. They must be getting something right and a big part of that something is opening new routes and therefore markets, giving the property investor the additional added freedom of massive choice within markets. Instead of flying to Rio and making your way to the north east coast of Brazil, fly straight to Natal. Want to investigate Morocco? Go cheap and straight to Marrakech. The bargain flight industry is booming and the frequent announcement of new routes indicates that this growth is on an upward trajectory, underpinning the viability of overseas property investment as a whole.

Of course, competition is key to keeping prices down and routes varied and travellers are advised to keep their wits about them when choosing a low cost option. Access from the airport to their chosen destination, frequency, flight times and so on are as important to the quality of the overall investment ‘package’ as the cheap flight price itself. With this in mind, investors might want to keep an eye on the impending US ‘Open Skies’ programme which will mean that any airline will be able to fly to any destination within the US, from any EU destination, breaking the stranglehold on passengers by a select few, expensive flight operators. It comes as no surprise then, to see low cost operators already offering one-way flights to New York for less than £20, plus taxes, a sure-fire way to reignite interest in a quietly stagnating market.

Whether you are purchasing abroad for personal use, for capital gain or to tap into the fly-to-let industry, knowing where the low cost airlines are flying is clearly one of the keys to investment success. With property investment playing an increasingly crucial part in the lives of people with no previous investment experience, it quite literally pays to keep an eye on the low-cost airline press pages, the announcement of new routes indicating the presence of a potential property hotspot.