Your questions answered
We’ve all heard all the stories about the property bubble and how it burst in locations like Spain and Florida, but many of us still want to achieve our dreams of investing in a beautiful property abroad.
Q: How can I REALLY MINIMISE the pitfalls when investing in overseas property?
This is the biggest question of all for anyone considering investing. There’s a vast amount of information out there, much of it complicated, and worse of all, some of it not true. It’s vital that investors protect themselves from poor or misleading information and it’s really important that they have as much security and peace of mind as possible.
Regardless of how much you’re investing, we always urge everyone to follow these three simple rules:
1 Identify EXACTLY what you want your investment to do. (That means: are you buying for capital growth, high income, or a place that you’ll love to visit? Or maybe a mix of all three).
2 Establish your budget. And don’t exceed it.
3 Find a company that you can genuinely trust to give you ALL the answers you need.
Q: Are there any ‘safe’ investments?
Yes. To find them, we always urge investors seeking safety to look for very specific, localised, investments. The truth of the matter is that these ‘niche’ investments are particularly good at delivering security with certainty.
Q: Are there any tricks that might help me make the right investment?
Yes, one in particular: always look out for any bias from the salesman – is their marketing predominately aimed at only one location or a small number of investments or destinations? If they’re not independently ‘whole of market’, they’re much less likely to be giving objective advice.
Q: What are the major benefits that I can expect from investing in overseas property?
There are basically three:
1 High income. If you want this, look for good rental returns in small hot spots like those now available in parts
of the USA.
2 Good capital growth. If you want this, look for properties that have a genuine gifted deposit, or properties that have a genuine below market value. (Always make sure that the valuations in these instances are done by reputable banks or valuers).
3 A gorgeous place that you’ll love to visit, and one that holds its value. (The benefits of this kind of lifestyle
investment speak for themselves!)
Q: Are there different levels of risk?
Definitely. In acknowledgement of this we, for example, rate every property product we carry on our website with three levels of Risk: Low, Medium and High.
We also attach the same three levels to the available Reward from every product. We recommend that investors are always completely certain and totally happy with the Risk and Reward of anything they do.
Q: How can I safely find out more about where I might invest ?
We’d urge any potential investor to start by checking the internet for an overview, and then learn more about specific details and available products by attending a seminar like our Wealth Seminars.
Q: Is it true that I can use my pension to buy overseas property?
Yes, but do be careful. If you use your SIPP to invest in overseas property you’ll not be able to visit the property yourself (the rules on SIPP investment prohibit investors from benefiting in any ‘direct way’ from their investments). Having said that: overseas property can be a very lucrative way to re-balance pension funds that have been depleted by poor performing funds and slow stock markets. Note: we would always encourage anyone considering the state of their pension to seek advice from an Independent Financial Advisor.
Q: Are there places I should completely avoid?
Yes: anywhere that doesn’t match your personal profile for investment. By which we mean: when you’ve got the answer to your question about identifying EXACTLY what you want your investment to do, make sure that you stick to that objective. And don’t get sweet-talked or persuaded into some exotic looking alternative. (For example: if you’re looking for high income, you’re more likely to find that in a solid rental opportunity than a gorgeous looking off-plan investment in the Caribbean).
Q: What guarantees can I expect from an overseas property investment?
Potentially there are quite a few, including: rental guarantees that provide a fixed yield for an initial period (look for anything between 3 to 5 years); bank guarantees that will protect your money should a development not be completed, and builders guarantees in the form of penalties that can compensate you if your investment doesn’t perform to a certain, specified, level, for example: getting completed on time.
Wealth Seminars
We try really hard to answer all potential investors questions at our Seminars, the next one is at the Birch Hotel in Haywards Heath on the 12th May at 2.00 pm. If your readers have any queries of any sort regarding their investments, we’d be more than happy to take their call or see them at our Wealth Seminar.