Cashed-up overseas property investors from the UK are still active in the market despite tough economic times both at home and abroad. What has changed, however, is that they have become much more discerning.
Today, they’re looking for “rock-solid investments” and are far keener to visit the property location, carry out proper due diligence and look for a return that beats the bank and bond deposits.
Stuart Law, chief executive of Assetz, commented that “the froth has been taken off the overseas market in recent years as amateur investors were deterred by increased risk and the end of sky-high capital gains.”
“However, a new leaner market has emerged, as experienced investors and holiday home buyers seeking a solid long-term investment for their spare cash remain attracted to high quality schemes in the best locations.”
“The position, facilities and quality of build must be spot on, with strong tourist rental demand and plenty of scope for personal use. Most buyers are putting down deposits of around 50%, as opposed to the 0 – 10% commonly seen just a few years ago, and focusing almost entirely on long-term rental income rather than capital gains.”
Despite the fact that the days of high volume sales from speculative investors are over, “there remains solid demand from Brits with spare cash earning little or no interest, looking for a holiday home which will also earn them an income,” says Assetz.
“Before the global downturn, only approximately 20% of prospective investors would organise a viewing trip to their chosen development, in order to investigate the developer, the local area and the quality of the scheme, however today that figure stands at 80%,” says Assetz, referring to its data.
“Buyers are much more cautious and are spending considerable amounts of time carrying out due diligence, researching the credentials of the developer, land ownership, local facilities and rental demand.”
Like we always comment, when buying property one should ALWAYS do due diligence and ensure that you’re buying for all the right reasons.