It is simply not true that you cannot make money in a downward market – ask any real estate investment professional and they will tell you the same thing. In fact, some will be so bold as to say a market downturn is the ultimate time to make the most money from property abroad!
So, if you’re thinking of looking overseas for real estate here’s how you can be making money from property abroad even now…
1) You make a good or a bad investment decision at the point of purchase not at the point of sale! You may think you make your money when you sell, but in reality you’re setting yourself up in profit terms at the point of purchase because if you pay over the odds for a property you will find it harder to cover costs with rental income and you will find it harder to reap capital appreciation.
2) You need to buy below market value – you need to hunt for developers keen to get off site and offload final properties on a development or you need to be in a market where damage has been done and vendors are keen to sell for example. Which is why now is a great time to buy property abroad in markets where the media is saying there’s a credit crunch biting and where it’s a well-known fact the market is struggling.
3) Look around for auction properties, properties that are being sold because they have been repossessed, because there has been a divorce or a death – this advice is not designed to give you a warm fuzzy feeling, it’s simply fact that in any of these scenarios you will find property for sale below market value and this constitutes a good deal for you.
4) Don’t try and do it all by yourself. Get agents involved in your quest for below market value properties for sale, get a good lawyer on side and get financial promises and deals in place. The less you micro manage and the more active effort you put in to getting a good team together instead, the more property deals will come your way.
5) Consider taking a short-term approach to a market. If you can buy a property well below market value and flip it back for sale before closing the deal in under 60 days you can make money no matter what the market does because in such a tiny space of time the market cannot impact you.
6) Consider taking a long-term approach to a market. Buy below value stock where there is rental demand that is not saturated with supply. Look at what you can bring in over 5, 10 or 15 years in the form of rental income and be prepared to ride some market waves during that time which you will end up coming out on top of because ultimately, you have made the deal up front and bought low.
7) Never take a medium-term approach to a market – a medium term approach will have you guessing the market. Successful property investors never guess the market!
8) Buy low in today’s market – it’s the only market that matters.
9) Commit to your investment strategy for at least five years…have a goal and stick to it. By seeing a bigger picture you will keep going even if a property deal doesn’t appear to be as profitable as you first thought.
10) And in terms of where you should be buying property abroad – where ever you can find a good deal! Just be aware that if you buy in a market where you currently have a currency advantage that that advantage can reverse…so do be careful with currency transactions.