Quote:
Originally Posted by pilliam
Hi.
I'm a final year university student with a nice lump sum (inheritance, unfortunately) to invest - around £30K - and feel that, in the current market climate / my personal situation, the foriegn market would be a better option than the UK.
I am considering both short and long term investments, looking towards a nice regular rental return (around 5 - 7% would be optimum, more would be great), in a country with a standard of living similar to the UK (not the bit where you get abuse from our yoof, the bit with indoor toilets and building regulations).
Although I am not completely deluded, I would ideally want a property with little or no mortgage eg a capital investment, to limit my personal liabilities (negative equity) and also for fear (as a student) of being unable to gain or, if successful, continue a mortgage.
I would appreciate any suggestions or guidance you guys could offer - my primary interests are price (as above), potential equity - short or long term, and revenue (to act in place of interest from banking it all!). A country with a reputable (and preferably simple!) property market would be great - the pitch has to be completely 300% watertight to convince my mother, who is to most extents the judge and jury in this case, and as such I am more interested in pre-existing properties as opposed to offplan property (lots of scary stories on here). I realise that no property is 100% risk free, let alone 300%, but it would be nice.
Countries which have taken my interest thus far are Sweden (the north particularly for it's low prices, potential nature tourist revenue and relatively high standard of life), Germany - Berlin in particular (prices, reliable income(?))- and good old France, mainly because it is very close and appears to have a highly devloped Anglo-Francais market. I imagine this will all read as fairly naive and optimistic, but...well...ummm....yeah, pretty much.
Many thanks,
Pilliam-au-board-de-la-mer  |
Hi
I think your main issue here is that you are looking to achieve 1st world levels of familiarity and security with an emerging market budget.
There are several emerging markets which you can participate in with 30k sterling and no leverage (mortgage) but no first world ones. The countries that you mentioned would allow you a large deposit with your money but still requiring leverage. However, you have got the areas right in terms of income which, in those countries whilst not high, should yield enough to give you a spread over bank savings.
If you want to enter the market unleveraged you are gonna have to persuade your mother that a little risk is necessary or stick your cash into some sort of savings account/bond whatever in the UK.
If you can take on a little risk then you definitely have options. At the moment Egypt is an ideal situation. Your 30k will buy you a 1 bed apartment on the Red Sea and, even conservatively, should match 7% pa yield - generally doing better. But of course it is an emerging market which is making great strides towards conformity with the ideas of first world investors, who always seem to want the same protections that are in place in their domestic market whilst only paying the prices in the local market. However, there is always an element of risk. Understand it and plan for it. Otherwise, settle for low yields from a bank account and no capital growth.
Cheers
Rick