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How secure is your property investment abroad?

Investment in the UK has been on the rise recently, as foreign customers see the country’s relatively stable economy as a safe bet. Things, however, are very different in both the Eurozone and the USA, with uncertain financial predictors making investors distinctly nervous. 

Although the market is particularly fluid at the moment, is actually ripe for smart investors to make a considerable profit on overseas investment. It is quite literally a ‘buyer’s market’, and with a little bit of forethought there are still considerable and secure investment opportunities to be had.

Where to head

Dubai
 
Currently, one of the most popular locations for property investment is Dubai. This desert state has seen an extraordinary amount of investment in the last few years, and shows no signs of diminishing in popularity. A stable economy and a very low crime rate along with a booming economy and a huge amount of investment in high-tech infrastructures such as the Internet and telecommunications make it an increasingly attractive location for corporations. Consequently, the number of foreign nationals looking for rental property in particular is growing, making it a solid bet for property investors who want to build up a high-end rental portfolio.

Add to this the fact that property prices are low in comparison to other locations, and with a host of new developments means investors can choose to buy existing properties or off-plan. 

However, there are still some risks, not least the rising levels of political tension in the region. An oversupply of new apartments could also lead to a housing glut, causing rental yields to drop and prices stagnate. However, there is no current indicators that this scenario is on the horizon, and yields of over 10% are perfectly achievable.

The USA
 
Despite its current economic woes, the USA is still a good bet for property investors, purely because of the range of options available. The primary locations (and Florida in particular) show no signs of slowing down, and overseas investors are still keen to put their money into Arizona, Florida and coastal Carolina. Oregon’s west coast also looks promising, and California still retains its popularity, although smarter investors may want to look beyond the usual LA/San Francisco locations, which are now becoming prohibitively expensive.

Europe

One of the constant challenges for property investors is to find that ‘undiscovered country’ and get in before the rush starts. Europe could be regarded as being ‘mined out’ for good property investment opportunities, but in fact there are still some to be found, especially in the Mediterranean countries such as Greece, Cyprus and some parts of Spain. Higher risk opportunities exist in the Balkans and Turkey, and Italy is not particularly favoured right now because of uncertain financial predictions, a low birth rate and disproportionately high property prices, particularly in the north of the country.

Other options include the Caribbean, South America such as Argentina and Brazil. Cuba could be the dark horse for property investors, but it pays to talk to an expert before venturing too far off the beaten track. 

Dot the i’s and cross the t’s

It’s also important to make sure that, no matter where you’re investing, that you dot every ‘i’ and cross every ‘t’. That includes specialist overseas property insurance, so again take the time to talk to an insurance broker and find out exactly what kind of coverage you’ll need to protect your overseas property investment.  As Robert Wilson, Client Manager from Aon Private Clients explains: Overseas insurance policies can be extremely complex. It’s really important to have adequate protection for your property whether it’s empty, occupied or being let as a holiday home and it’s worth noting that often local policies often offer very limited cover. Also, some areas of the world are particularly vulnerable to natural phenomena such as earthquakes or storms so it’s important you speak to someone with the knowledge and skills to protect your property.
   
Know why you’re investing – is this a long-term option where you’ll be looking to rental yields to cover initial and maintenance costs, or are you looking to do a quick turnaround and sell on? If you are purchasing property to rent, then consider that you may also need to pay extra fees for an agent in the country where the property is located to maintain and oversee the property. 

You’ll need to factor in routine maintenance, as well as any taxes that may be due on your investment, both here and in the country of origin. This is a particularly important factor to take into account when looking at overseas property investment. As always, the advice is to talk to your broker and do your research thoroughly beforehand, so that your investment is secure, safe and profitable. 
 

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