Property Investment?

Property Investment

Investment and property are two words that are put together far too often! I rarely offer “investment properties” because I am generally cynical about anything sold this way. Normally an “investment” is something that no one wants, so the only way to sell it is buy saying it is cheap and will go up in value or will produce an income!

Any purchase of property must inevitably have an investment element to it because no matter how cheap, it is a big ticket item! It takes a lot of hours work to buy the cheapest property and for anyone making this commitment there has to be a belief that the asset will at least retain its value.

During the boom there was a huge amount of misselling and misinformation out there. Property was being sold as a commodity rather than as a usable product. People were urged to buy on the promise that they could make a profit on a property just as they would by investing on the stock exchange, buying gold coins or putting their money into a bank savings account. We were constantly told that prices here, there and everywhere were rising by 20% pa. Why? Who was buying and why were they buying? If it was because people needed a home or wanted somewhere for their own holidays all well and good. Too often however this promise of market appreciation was no more than a way of selling people something they didn’t want! A typical example could have been the person who wanted a Costa del Sol villa. He can’t afford it so a clever salesman suggests he buys 5 off plan apartments in Bulgaria (properties he doesn’t want and will never use in a country he has no interest in). He is told that they will appreciate 20% pa and in 2 years he can sell them and buy the villa he wanted in the first place. Neat! Believable if you listen to the media hype! The reality is that a lot of people got their fingers burned.

So what makes a good property investment? Here are some questions that might help

1.      Who is the End User? Who wants to live in this property? If I wouldn’t live or holiday there, why should anyone else?

2.      Is there underlying value? Is it in an area people want to live? If it is then it will rent well and the underlying capital value will be safe. If the area is bad then so is the investment.

3.      Is the promised return on investment realistic? If it seems to be too good to be true it probably is. High returns usually mean high risks and just because you can’t see the risks it doesn’t mean they don’t exist. I have seen great returns offered in Detroit, USA for example but some easy research says that these are not good investments.

4.      Why are they selling to foreigners? If an investment is good surely the locals would be at the front of the queue to get a piece of the action?

5.      How will I manage my investment. Lots of people will sell me a property but how many will stick around after to make sure it is let.

Answer those questions and you will have a pretty good idea whether you are on safe ground or stepping off a precipice!

This is a starter on the subject of property investment and I will aim to cover some of the tricks of the trade in coming weeks.

http://www.tickle-international-property.com/
Email: bill.tickle@tickle-international-property.com

2, 4, 6, 8 Do We Want To Integrate?

As I cheered Bradley Wiggins home to his win in the Tour de France I was struck by a thought. I haven’t lived in the UK for more than 16 years now and in that time I have probably not spent 2 months in total visiting. When I do go back to visit family I generally feel like a stranger in my own land; it feels foreign, alien to me and generally I can’t wait to leave. But, despite that, when they run the Union Jack up the flagpole, the anthem starts up and the team in white takes the field, or a Briton does something special I am at the front cheering! I don’t understand quite why but that’s the way it is. I also suspect that I am a pretty typical “expat” in that regard. We may leave our home country physically but there is always a part of us that can never leave.

This begs the question, if I am so programmed how do I relate to my new home when I move abroad and how do I fit in? I regularly hear people tell me that they are going to integrate in their new country, how they want to mix with the locals and keep away from expats in general and their countrymen in particular as they become part of the local community. The intention to “integrate” may sound admirable but when newcomers talk about it invariably older hands roll their eyes and look to heaven! Why? Well apart from the fact that it’s hard to integrate when you don’t speak the local language it also indicates that they have no idea of what it is like to be an immigrant. In some remote villages in Andalucia if you aren’t related or married to anyone in the village and don’t grow olives you won’t have much to talk about! One of my first business partners, a Chilean lady, told me that the neighbours in her village were very nice but all the ladies talked about was what they were cooking their family for dinner and the latest cleaning products. Flavia, after a career in real estate and property development, now lives near the beach on the Costa de la Luz and earns her living as an artist. Talk about different horizons!

The reality is that most arrivals come from a comparatively sophisticated, urban background. When they move abroad they want a better life but that should never mean leaving up the good things from “home”. So instead of thinking about giving anything up, you should move because you want more; wider horizons and new experiences. When I lived in Spain I ate raciones of calamares, pulpito and prawn pil-pil but that didn’t stop me enjoying an English breakfast on the sea front or even the occasional fish and chips! I enjoyed the Spanish way of life but didn’t have to give up being British or be ashamed of going back to my roots.

My best advice therefore to all new arrivals in any country is to see those who have gone before as a valuable resource. People who can tell you where to shop, where to eat, how to pay your bills or find a plumber and how to deal with bureaucracy. The locals don’t see the problem; they have grown up with the local way of doing things so everything is second nature and obvious. You however need to learn the ropes from scratch. As a result you will, as a new arrival, have more in common with German, Dutch and Scandinavian incomers than with the locals simply because you are sharing the experience of immigration. That doesn’t mean you should head immediately to an expat ghetto! On the contrary, I can’t imagine anything worse. Enjoy your new country but go into it with eyes open, take pleasure in the company of others journeying on the same pathand accept that you will find your place in your new community by being yourself rather than by denying your personal heritage.

http://www.tickle-international-property.com/
Email: bill.tickle@tickle-international-property.com
+44 208 144 5525
+598 424 80 563
Skype; tickle.tip

Independent and Trustworthy?

I  was recently quoted in the British Daily Telegraph telling the world why I liked Uruguay. I have never spoken to the journalist in question and I don't think that she has ever visited the country she was writing about. Instead her "authoritative" piece was nothing more than a lift from an International Living magazine article.

This set me to thinking. We tend to look to the media for advice and unbiased information, but how often do we get it? I long ago gave up on UK buying property abroad magazines because they were full of gushing puff pieces proclaiming the virtues of whatever project their biggest advertisers put in front of them. In depth, independent, questioning? You have got to be kidding!

TV Programmes like a "Place in the Sun" were equally unreal (remember when property prices were always going up by 20% pa everywhere they went?) and whilst in the past you could at least look at the scenery in the background, these days the cameras rarely leave the presenters! The best story I heard was of a special in depth documentary in which a lady from Yorkshire was ferried around Marbella looking at reduced price flats and prattling on about how she was looking for a bargain. Apparently she now lives on a mobile home site near Antequera, never had the money for an apartment and was never looking for one. The TV people needed a face and who was she to say no to being accommodated and wined and dined around Marbella?

The internet seemed to offer a real alternative but even here you need to be careful. From the USA there are a number of supposedly "independent" advice magazines and news letters. Unfortunately those independent reviews are nothing of the sort and all too frequently the journal is on the seller's payroll. How do they get away with it? Well the company that owns the journal has a "separate" real estate company. One does the promo and the other receives the commissions. Neat, what!

So who can you use or trust? Well, apart from me (obviously), follow your own instincts! Don't rely on one source for information and always compare and contrast. Talk to agents, look at those messageboards and Facebook groups, go to exhibitions and hear what people have to say and then apply common sense. The more you learn about your chosen destination the more other people will respond to you.

http://www.tickle-international-property.com/
Email: bill@tickle-international-property.com
+44 208 144 5525
+598 424 80 563
Skype; tickle.tip