Guidelines for your Investment Strategy

First of all we need to decide whether we are looking at earning an income from either letting the property or from capital growth or possibly both. The next factor in your investment is what is your comfort level around your risk investment. This is a little more complicated to factor as you have to decide the risks around either growth or rental. The risk needs to include the external factors discussed in the previous article. Of course if you have a large financial buffer such as savings are much disposable income you will probably feel that you can afford to take a greater risk. Included in your strategy you will also consider how long you want to invest for. Purpose you want to get on the initial surge and bubble of new niche investment opportunity and make a quick short term investment and then get out. Alternatively you may decide to investment long term. In both cases you need to look at your exit strategy. What are your costs in exiting out of your investment and how easy will this be. Could you suffer a great financial loss if you exit early.

Investment secrets uncovered

The problem with investing abroad is keeping your eye on your investments. You need to think carefully before investing your hard earned cash in an asset a broad and have a well thought out strategy. First of all your market research needs to include to some extent understanding the country, politics, local culture, crime, growth, outside influences, tourism growth, pollution, language, building, landing regulations, etc.. etc. this list go on. What are your are looking at is how your investment will grow and what may affect it. Secondly are you using the property as a buy to let investment. If so you need to consider further factors that may affect the letting of the property and even before that how you will finance the property and in what currency. You could loose considerable money when an exchange rate changes if your buying in your home currency and the foreign currency suddenly becomes strong after you have signed a legal binding document committing you to the final instalment of your off plan investment. It’s incredible how many people invest in a property in the UK going to great lengths of getting expensive surveys and been really choosey about what light fittings are being left behind yet are willing to buy or property abroad even on ebay. Some friends of friends were really delighted this week when they announced that they had just purchased a property on ebay for £20,000 in Bulgaria. I never asked if they had got title deeds or anything else. Some other friends came back from Bulgaria last year and had purchased a property at the bottom of a mountain for £5,000 which needed complete renovation. This on the other hand was not for a property investment more as a holiday ruin to stay whilst hang gliding which they were going to renovate in their own time. What’s really put me off property investment abroad in some countries is when friends have come back from inspection trips abroad. We were really interested in purchasing in Montenegro as after reading much information about the development it appeared that growth was going to be very carefully controlled and it could really be the niche eco tourism place of Europe. Well maybe it will be however, the development pace is incredible over there and the climate quite humid causing a lot of damp issues during winter. Some of the very nice hotels over there suffer issues with damp and building problems. I suspect that the building standards may not be up to the same standard as in the UK. I’ve heard a lot of this news second hand so if I were still interested in investing there I would do my research first hand. What I am pointing out in the blog is that there are external factors you need to research. Several countries I have been interested in investing in have been Turkey and Bulgaria however, after reading several news stories on each of the countries I’m now re-thinking. The EU has stated that Bulgaria must tackle organised crime before joining. The levels of organised crime are very high so you must go in with your eyes open if you are to invest here. Additionally, if you buy cash to a friendly face in bar or over the internet you could be handing over cash to organised crime and find yourself involved in money laundering. Of course this can be avoided by dealing with retuable estate agents and never paying cash. Apply the same common sense to purchasing a property in the UK and then apply some more common sense and do your research. Like most people I’ve got carried away with watching the home in the sun programmes on tv and watching the top ten investments. What they don’t concentrate on is the other factors involved in investing. Like crime, factors affecting your investment, safeguarding your investment, do’s and don’ts, how your going to let out your property. We’ve several friends who use to own property and rent out the property. Some friends have been really successful and paid off their mortgages very early on these properties and then reaped the benefits later on in life. However, other friends have been less successful and had to spend a lot of money constantly replacing items, re-decorating, blank spots in letting the property. We’ve recently got on the property band wagon and purchased properties in the NE of UK. We’ve got one property that is empty where we are struggling letting it out. There are quite a few costs in keeping this property that we really think about and just assumed that it would be rented – very naïve I guess. We are now paying management fees, council tax and thinking about whether we need to keep the heating on whilst the property is empty. Additionally there is insurances on top of the property. So okay we have an investment that should grow we are having to dig deep in our pockets to keep this.