Investing abroad

M

mad4money

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Hi All

I am interested in investing in abroad and am the initial stages of researching into this area.

I wonder where are the areas to look out for?

Read a few articles on Toronto in Canada and it seems interesting. What about the countries in Eastern Europe or the new entrants to the EU?

I have one investment property here in Ireland which is working out fine but I think there are better returns to be achieved abroad.

All ideas and advice apppreciated
 
Hi mad4money

It really depends on your circumstances and what you're looking for. For example, are you looking for an regular income or a capital gain? A long term investment or a short term investment? Investment only or investment with some holiday use? Primary real estate vs secondary real estate? Amount of capital available to invest? Feelings about managing overseas properties? etc. etc.

Picking some of the main countries and commiting the sin of over generalising ... Capital gains in some Eastern European countries are good but rental returns may be poor. Capital gains in France are average to good and rental returns are average to good (and in some cases guaranteed). Capital gains in the Spanish costas (outside of Costa del Sol) are good but rental yields appear not to live up to expectations ... etc

Regards,
Paidi
 
Thanks for your reply Paidi

I am interested in the property solely for investment purposes - not a holiday home venture etc. i am interested in a long term investment with regular rental income.

That said i would consider a short term investment where there might be good capital gains -are we talking the emerging eastern european countries here?

I have heard that Germany is a good long term investment because there is little interest in home ownership there and there is generally a good rental demand where tenants tend to be long term in many cases. Have heard that for example one can buy an apartment in centre of Munich for circa €160K and the rental returns are circa 6-7%. Sounds good compared to Eire.

Any ideas?
 
I wonder how does investing in a syndicate property compare to making your own individual purchase?

Solas Financial in Cork are offering shares of €50K in commercial property in Budapest. They promise rental yields of 8.75 net and mention potential for good capital appreciation

I wonder is this a safer bet than buying an apartment in Budapest?

Comments appreciated

Link to syndicate info below


[broken link removed]
 
Solas Financial in Cork are offering shares of €50K in commercial property in Budapest. They promise rental yields of 8.75 net and mention potential for good capital appreciation
Click to expand...

how do you benefit from any capital appreciation. ie who decides when to sell and how much for . it seems to me it would be very easy for an unscrupulous management co to sell under market value.
 
Hi mad4money,

Maybe I'm missing something, but this doesn't sound like a great deal to me: You put in €50K...you get out (hopefully) €4,375 a year...and as, presumably a minority stake holder, you have no real say on when to sell? And if the property appreciates 20%...does your original €50K appreciate 20% too?

If you're interested in syndication, and Eastern Europe, then why not club together with a friend or family member (all above board, proper agreements, etc.)? In Bucharest, Romania, you can buy and renovate a small apartment for less than €80K. If that market mirrors Croatia, capital gains could be significant.

For less, maybe €70K, you could get an apartment in Auckland, New Zealand, for short-term rental; for less again, a house for long-term rental with rental yields of about 10%.

regards,

J.
 
Hi Mad4money

You could write a book in reply to ...

>> 'I am interested in the property solely for investment purposes ... i am interested in a long term investment with regular rental income'.

If you're interested in creating a credible income from your investments then that is likely to rule out many places where 'joe bloggs' is currently investing.

If you look at the emerging Eastern European markets then the price increases over the past few years mean that property prices have outstripped the incomes of the local market. This has a negative impact on rental yields in relation to property prices. Perhaps you could look at secondary cities within these countries, which have seen nothing like the same level of price appreciation.

You are likely to get a decent return from those Eastern European countries that are likely to emerge but haven't yet done so. However, you may need to take onboard degrees of political, social, economic and currency uncertainty. It is worth reading some of the posts about these countries that have been posted recently on this board. Also due to the low prices and rents, it is likely you would need to build up a large portfolio of properties in order to get a half decent income.

The UK is currently seeing a softening of property prices and a rise in rents. It may be worth looking at.

There are respectable rents still to be had in many cities in Western Europe e.g. Madrid, Paris, Brussels.

I would avoid many of the popular resorts, especially the likes of the Costa del Sol. Prices are reasonably high and rents are very soft and do not live up to the expectations of new buyers.

I looked briefly at Germany last year. There has been price depreciation there for a number of years and I felt prices still hadn't bottomed out. If they have then perhaps it is now worth considering.

For a balanced property portfolio then perhaps France and UK/US are worth looking at. UK is likely to see some price increases next year with the widespread adoption of property pensions.

Regards,
Paidi
 
Sofia/Warsaw

Thanks for replies Paidi and Scotty.

I have been researching into investing in eastern Europe further. Have got details from a company caled SEP in Galway who are selling apartments off the plans in Warsaw in Poland. 2 beds for circa 130K

Have also been checking out Bulgaria. there are some upmarket developments available through

[broken link removed]

These apartments are in Sofia. Bulgaria is due to enter the EU in 2 years so I would assume there could be a better chance of more capital appreciation there than in Poland where prices have already increased a good bit.

They also have apartments in more middle class areas for circa 40K.

I wonder would you be better with a 1 or 2 bed apartment? I could buy three 1 beds in middle class "on the way up area" or two one beds in a more upmarket development. The apartments in Sofia are marketed saying there is an excellent rental demand. I wonder???

I reckon there could be more of a demand for the more middle class apartments because they probabley couldnt afford the rent in the upmarket units. However if you could get the tenents for the more upmarket dvelopments, chances are they would be easier tenents.

Potentially libellous comment removed

Has anyone invested in Bulgaria or Poland or dealt with the company's mentioned above?

Advice/information appreciated
 
Re: Sofia/Warsaw

[broken link removed] may be of interest to anyone considering investing in Bulgaria.
 
I have been researching into Poland as an investment option. Have came accross an irish company selling properties in Ponzan. They describe it as a very progressive city of 700,000 approx population.

Properties on a site adjacent new university campus from 35 to 65K - studio, 1 and 2 bed apartments.

They also have what they describe as " a luxury block of 96 apartments in city centre", studio, 1 and 2 beds from 55K to 141K. They say all these should repay in less than 20 years in rent alone, not counting capital appreciation

Mortgages available from AIB in POland for 4.99% (if borrowed in euro)

I have 50K which would enable me to borrow another 100K. I know there is risk involved but i dont think there are the same opportunities here in Ireland. if anyone has any other ideas of how I can invest this money wisely......let me hear em!

Anyone have experience of buying in Poland/Ponzan?

Advice/info appreciated
 
Hi Mad4money

Do they mention the rental yield you would expect to earn on these apartments, the costs, the taxation situation, etc.? It may be useful to cross check the expected rental yields with at least two local rental companies.

Regards,
Paidi
 
Re:poland

Thanks Paidi for reply,

There is a joint taxation agreement betweem Ireland and Poland. Tax is pretty similar. One stipulation is that if you sell the property within 5 yers and you do not reinvest the proceeds in Poland you must pay 10% of the price in tax. I am not overly worried about this as I intend this as a long term investment.

Anyone have experience of buying in Poland?
 
Re: Re:poland

Solas financial are definatly worth talking to.
I think the US is attractive, but personally would wait for the dollar to hit 1.40 - 1.45.
I think munich is a good one. I have a friend from there and am just researching the costs, will let you know when i have more info. I have looked at NZ and think there are some interesting returns(also good excuse to for holiday) to check up on your property every year:)
 
Investing

Thaks for reply Ean

Would love to hear what you find out about Munich.

I have just heard of a friend of a friend, marriedf to a Polish girl, living in Warsaw. May see if I can get any info through that.
 
Re: Munich

One problem that may not be immediately obvious to would be investors in the German rental market is that the law weighs heavily on the side of the tennant. Even in prolonged cases of non-payment of rent etc. it can be very difficult to get them out. Just my $0.02.
 
Does anybody know is gran canaria a good place for long term growth/rental income. The island seems to have a year round climate
 
More that one person has suggested that one area to avoid is the costa del sol.
I find this unusual as official central statistic office figures from Spain show capital appreciation at 15% for last year and expected figure for the current year of 10-15%.
Surely this ia good return???????
 
Surely the costa del sol is a market you invest in for good capital appreciation and not for rental. It a market which produce a good return in a well developed market.
 
>> 'More that one person has suggested that one area to avoid is the costa del sol. I find this unusual as official central statistic office figures from Spain show capital appreciation at 15% for last year and expected figure for the current year of 10-15%'.

I believe they are figures for the Spanish property market as a whole. Each region, each city, each village, ... has it's own dynamics. I wouldn't expect to see the Costa del Sol hit the same highs as it previously did. I think the market has moved towards a buyer's market with more realistic prices setting in. There is a lot happening there that will have a positive influence on the future of it's real estate market. Some would ask why it took this long. So I don't necessarily agree that it is a market to be avoided but one should definitely be cautious.
 
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