Where is it HOT right now! - Page 3

Goldberg Global · #21 26-04-2008, 11:38 PM

Investy,
You can get 11% yield in sterling in spain at the moment on your cash, so 5.5% is rubbish.

Remember if you hold cash in the bank you have 2 things against you
1. Tax on interest
2. Inflation

Your money is just used by the bank to make them money, so any one who is going to get rich is not going to make it sticking it in the bank. If you are rich then it is different. So off the high horse and lets get down to business.

You make good points about bottoms in the market, this is real estate bottoms not cute asses. And buying for value and where it is priced well, or reasonably against yields.

To discount not buying off plan because a developer can go bust is not really that credible. Why? In some markets eg. Spain a developer has to bank guaranteed your funds when they build so this does not happen.
In other markets developers have securities in place so this can not happen.

In Brazil, and other emerging markets, yes, you are going to have to get some hot lawyers, some hot bankers or be willing to play with risk, or rather minimise it, how? that is the question. Use credible people to start with. But like these markets, it is percieved higher returns.

Lets take what you say about Brazil, and Romania, you are talking about 4 months of tourist rents a year, which would be short term lettings. Now that is not where the action is. The action is in the long term rental markets, and also in buying off plan.

So the old eye piece is looking for something that is not there. Sure you can buy a resale at xyz at market rate and you exclude the risks of the developer defaulting but you miss the profits made in construction. Fair enough you dont want to ride that risk.

But you have to get the mind out of the tourist rental market. You have to look at where people live and work. Proper buy to let, if this is your style, then you will find markets like Romania with severe new housing shortage for local people.

Look at where the money is flowing to , with mortgages and where people work, not where people go on holiday and then when no ones got money, no one goes and your rental yield is screwed up.

I hope helps, and sure we have some diamonds (good properties) if you wish to be in touch. The very best. Very.

Quote:

Originally Posted by Investy

The point most agents on here keep missing is this;

I can put money in the Bank and get 5.5% yield, no worries, no fees, no selling costs, its liquid, no developer who might go bust.

So many of you say "x" is hot, for example Brazil or Romainia, but what does this really mean?
What if I want to sell my off plan property? THIS IS MUCH HARDER THAN YOU THINK FOLKS. The agent who sold you the property originally probably wont be able to re - sell it, afterall he will have moved onto another NEW development, which is HOT!

I've been at this for a while now. There is so much property out there all seeking the same dollars.

SO QUESTION ONE TO ALL THESE AGENTS:

1) Ask them - will it produce a net total return above 5.5% I could earn in the Bank AFTER ALL COSTS INCLUDING INTEREST LOST ON THE MONEY YOU PAY OVER TO THE PROPERTY, TAXES ETC

This means you need a gross return of about 10% pa to make it worthwhile.

I bet it wont..............

What happens when you die, how do your kids EASILY extract the money.

Back to Brazil, Romainia etc - next question;
2) When will the rent start and how many months per year will I get?

You will often find you end up with just a few months rent per year, which after your ongoing maintenance costs, lost interest and so on renders the investment pointless.

I recommend you buy now only where property prices have crashed. The US looks promising although getting the right investment, with no hassle and year round rent will still be hard work. The dollars low price also makes the US a prime candidate.
Forget the ****pits in declining industrial cities where no one wants to live though.

Id look for prime city real estate that has defined ongoing rental demand and no restrictions on renting the place out.

CAN ANYONE SUGGEST SOMETHING TO ME, I DONT KNOW WHICH CITY TO TARGET?
I want it on the Eastern side as flights not so long.

I want it cheap though, and will only consider places where prices can be proven to have fallen a good percentage.

A MUST FOR ME:
I will no longer consider a developer who wants me to part wioth cash up front. Why should I take the risk that he may default?
There are plenty of finished properties I can buy, so I will no longer bother with developers who want money up front.

Goldberg Global · #22 26-04-2008, 11:51 PM

A MUST FOR ME:
I will no longer consider a developer who wants me to part wioth cash up front. Why should I take the risk that he may default?
There are plenty of finished properties I can buy, so I will no longer bother with developers who want money up front.

THIS IS IN MY EYES NOT A GOOD ATTITUDE. BECAUSE YOU WILL LOSE ALOT OF MONEY AND POTENTIAL. NO DEVELOPER/VERY FEW WILL ALLOW YOU TO BUILD WITH NO MONEY DOWN. BECAUSE IT SHOWS LITTLE OR ZERO COMMITMENT. WHY SHOULD YOU BENEFIT WITH NO INPUT!
IF IT IS SOLD 100% FINANCE, THE PRICES OF FINANCE ARE ALL ENCLOSED IN THE DEAL. EVERYONE NEEDS TO MAKE MONEY.
EASY TO GET INTO A DEVELOPMENT, EASY TO GET OUT, LOW RISK, LOW REWARD.

rowlandsbb · #23 27-04-2008, 06:08 PM

No country is hot right now for property investment by non locals because the credit crunch has worldwide effect
from previous experience [ been in the property business a long time!!....first crash 78!] it will be 2010 before we start to see any movement anywhere
But there are still good buys, even for dealers but it is best to stick to the established markets rather than those where there has always been a high level of risk and potential profit [ high risk= high profit when it works]
Banks when they cut back to do so with the risk developments so expect to see lots of ' problems' in the so called emerging markets, which have been popular for some time
If you have bought off plan to flip.....[a] you will be lucky to find a buyer [ b] may not get built [c]

EU established markets are best for anyone living in EU and in times like this the Life Style buyer [ which everyone who wants to flip is looking for] sticks to the locations they know best......Spain France
In Spain, which does have a strong economy. there are some good deals...eg 2 bed maisonette from circa £83.000 , 3 bed villa with pool close to Costa Blanca beaches from circa £188.000 and if you really want a good buy Almeria 2 bed apartments from £79,000 , 2 bed bungalow from £116.000 and 2 bed villas in 400m2 plots 25 mins inland from £134,000
And with the new regulations no legal problems or worries
in 2008 this must be the best Life Style location and there are some good re sales deals.....in fact there are also some good Key Ready deals at Polaris World ......want to know? .....then get in touch

9009Ali · #24 28-04-2008, 11:58 AM

Hey .. Just read some of the posts above and must say that there are some very good investments if you know where to look. Not everything i linked to the dollar (credit Crunch etc). I brought a 1 Bed in Dubai (well put down a deposit) in 2005... and guess what .. due to the days and the 2nd class management I'm still waiting for then to start construction.

Meanwhile, I invested in Malaysia - An emerging tiger economy ... de-peged from the Dollar .. I put down a deposit for a 1 Bed ... it was built 18 months .. and I have sold and taken profits (net 45%) from it and have decided to reinvest in another project out there. I understand it is a long way for most (SE ASIA) but to be honest they operate like true professional .. all documents from Solicitors .. Exceptional legal / postal systems/ no issues with an overseas mortgage / .. Can't praise them enough...

Anyway, the latest project I'm investing in can be found on Sepang Goldcoast (this is the actual developers site - I'm not connected to they at all) ... have a look under forthcomming projects ... Theres one called Tropical Cluster Village!

Please understand that I'm not an agent ! just someone who has invested in Dubai and regrets it .. should have found this place in Malaysia years ago.

PM me if your interested on what I've done so far etc ..

ps .. I'm an investor who resides in the UK and wants to oneday live in a sunny climate and not do a 9-5 mon - fri just to pay the mortgage !

Cheers

The Soup Dragon · #25 28-04-2008, 12:58 PM

Goldberg Global. Agree with much of what you say, but will chip in my tuppence worth where I disagree.

Bank guarantees, like normal insurance products, differ in what they cover. Potential investors should assess what the guarantee covers, and more importantly, what it doesn’t cover, prior to investing. Sadly very few make that assessment. My point here is that people need to realise that having a bank guarantee may not be adding much of a safeguard to their investment.

You also mention missing out on profit made from construction if you buy the finished product rather than off-plan. I disagree (in general.) Off-plan prices are generally what the finished product would go for if it were available today. Any appreciation that comes tends to be from house price inflation, not ‘construction profits.’ Those profits go the developer.

Investy · #26 28-04-2008, 03:32 PM

900 - I reserved a water bungalow on the Sepang Gold coast palm but withdrew. Not a bad investment but the devloper was very unprofesional despite all the platitudes from agents. For example I (and others) were put off by the website that was exactly like that a novice amateur home website builder would deliver.

Furthermore there were no photos of the beach despite lots of requests.

In the end why should I put up with such poor delivery. If I was the chief of that developer everything would be preofessional and investor freindly. Why on earth should I beg for such simple things as a phot of the beach - afterall the beach is pretty fundamental!

Also I was'nt sure about capital appreciation. It seemed that all you were really doing is stumping up the money for a hotel (albiet a palm shaped one) to be constructed with ownership of an income stream, but again many questions remained unanswered and the so called rent guarantees had a lot of holes in them.

Investy · #27 28-04-2008, 03:39 PM

Godlberg, I'm not saying buy with a 100% mortgage, thats a separate issue.

I'm argueing one should only part with thier money once a property is actually delivered as there is so much supply out there, it is simply adding to the gamble by paying up front fro pre built property - why bother.

You might argue in the past one could expect capital growth during the build phase but this is unlikely now and in any event there will always be investors looking to sell on at completion due to changes in thier circumstances, so you may as well buy one of those (for the original off plan price) rather than take a risk on a developer.

Also you say no one got rich investing in cash, I used share your sentiment, however the point about storing cash is that you can use it to very good effect when golden opportunities arrise (for example credit crunches).

The late head of Marconi had built billions in cash for the firm, then along came whizzkids fresh off MBA courses that bought up the company and 'invested' in the dotcom boom losing the lot in the process........

rowlandsbb · #28 28-04-2008, 03:53 PM

Investy
Surely buying anything where you can not first visit the location and then do follow ups is not an investment but a gamble ....even if the presentation is great as that in itself is no guarantee that the development exists.....photos can and do give false impressions
For property investment you really do need to be face to face
I know that people have bought and sold with a profit off plan . no visits and just from the internet but that is not investment just a good old fashioned gamble!
Even if the professionals involved appear good...it is still a gamble
Nothing wrong with gambles if you can afford to take a loss but I suspect with the world wide credit crunch a lot of ' gamble ' type investments in property will get into difficulties
Seen it all before!!!!
With regret a lot of inexperienced ' property investors' will get burned....not just in the Far East, Dubai Egypt but closer to home in Eastern Europe...and even in UK France and Spain in certain sectors and if you have bought to ' flip' and can not afford to hold
In times like this you buy in established markets with good research and that includes UK France and Spain...be selective and you will have a good long term buy.....and it is easy to establish that the development is not a ' con' or just a bad deal

9009Ali · #29 28-04-2008, 04:31 PM

Investy - Thank for the reply.

I missed out on the GoldCoast Palm but I know some investors who have an interest there. The website Sepang Goldcoast gives uptodate infomation with actual pictures of the development site.

I have reserved one on the Tropical Cluster Village and its with the same developer. Hope I'm doing the right thing .. but then its all speculation .. right.

I thinks its better than the one I brought in Dubai .. IC phase 3 .. Its been almost 3 years and its not even started yet !

Yogi · #30 29-04-2008, 09:50 AM

Hi

I have bought on the Sepang Goldcoast Palm. Apart from the Mortgage side of things I have been impressed with the way the whole development has been handled.

One of our investment party actually went to visit the site to try to allay fears about the beach/water/shipping etc... (some of the things investy mentioned). He reported back everything was fine, the water was clear, the beach was clean and not a ship in sight (The Malacca Straits are 75miles wide at the point the Palm is being built).

The construction is on schedule, I have heard it may be even ahead of schedule. The fact that it is actually been built is a vast improvement on some of the stories I hear.