So, you want to invest in overseas real estate? You want to derive a profit in the form of an income? You want to get the best rental rates and enjoy the longest rental period possible? Okay, so where do you buy? In this article we look at getting the best rental returns from property abroad by buying in the ‘right’ location where you will get year round interest and have the potential to generate year round profits.
There are four criteria that can be applied to the search for the perfect overseas property for rental returns and they are: buying in a place where there is a chance for a dual sports season, buying in towns and cities with strong cultural appeal, purchasing property where there is guaranteed year round sunshine or buying by a specific tourist attraction…
Locations that have a dual season for sporting activity include mountain resorts that double up as ski resorts in the winter and hiking and biking resorts in the summer. In terms of emerging locations to consider, how about Bansko in Bulgaria which already has massive winter sports appeal and which is now placing significant investment into generating sustainable summer tourism appeal with the development of a golf course and the enhancement of local amenities and facilities so that they are of year round interest. An established resort with year round appeal is La Molina in Spain which is the oldest ski resort in the nation and which is a stunning location for summertime outdoor activities.
In terms of towns and cities with strong cultural appeal – stay in Europe – why go any further afield! Europe arguably has the most fascinating and fashionable cities such as Paris, Madrid, Barcelona, Munich, Berlin, London and Rome, and what’s more, they’re all easily and cheaply accessible from all over Europe thanks to the cheap flight operators filling the skies above our heads! Or you could head Stateside to New York if you fancied something a little more long haul and expensive! One or two bedroom apartments as well located and as close to transportation links as possible rent well in all the cultural capitals of the world.
In terms of guaranteed sunshine – well, there are few places that really have no rain – if you want no rain you need to be looking at desert locations such as Dubai perhaps, or if you can’t afford the steep price tag you could consider the emerging alternatives such as Ras al Khaimah or Ajman? More affordable options include Cape Verde where there is a good chance of excellent weather for the majority of the year…and then of course you have the likes of southern Spain and Cyprus. Whilst the latter two alternatives do have cold and wet winters in January and February, they still make good rental choices for property investors as many older expats tend to favour the destinations out of season and you do get an extended rental period as a result.
The final option available for those who want to get the best rental returns possible from their property abroad is to buy a place within close proximity to a specific tourism attraction – the most obvious choice being Disneyland especially now that real estate in America is so cheap!
If you do want to earn rental income from your investment property, location is the most important criteria to be applied to your search. You then need to think about what your tenants will want from a rental property in terms of its size and proximity to specific amenities for example, and finally you need to examine likely rental returns compared to purchase price to see what your yield will be and whether it is worth buying in. Never forget that there will probably come a time when you want to sell and get out of the market – in which case, in the back of your mind you should also always have an exit strategy.