Are you considering or have you already embarked on the property development path? Property development and investment can be a successful and lucrative enterprise, on both a domestic and international scale.
There are various forms of international property development and investment and each have their own pros and cons. The key question in the first instance is whether you are planning to buy to sell or to let.
The difference between buying to sell and buying to let
Are you looking for quick money and fast returns or planning on long-term development? If you choose correctly, investing in key improvements and selling at the right time, buying property with the intention to sell it on at a profit seems like the quickest and easiest solution. Buying to let offers the opportunity to receive a regular income from your investment, but does involve a long-term commitment to the property, which you can either run as landlord or hand over to a management agency.
Today, buy-to-let seems like a great option, with mortgage rates at record lows. However, there are pitfalls, the large fees currently charged by banks and building societies, which are often highest on the lowest mortgage rates, can significantly increase overall costs. You’ll also need to consider the rental market you are targeting; long-term or short-term lets; younger people or families? Each brings its own requirements in a property. In addition, you’ll need to consider the area – not only the country, but also the neighbourhood.
Choosing the right location
International property development is exciting because there are so many undeveloped areas around the world where property and land is still extremely cheap and offers great potential. You’ll really need to do your research, however. It is surprising how many would-be developers buy property or land overseas only to encounter problems because of local laws or regulations they were unaware of. It is therefore crucial to speak to a solicitor or similar expert in the laws of the country you propose to invest in before signing any agreements. You should also try to find out as much as possible about the current economic and political situation in the country; if it is unstable, the ‘bargain’ you were planning to invest in might not prove to be such a gold mine a few months down the line.
Taking advantage of tourist hotspots, as well as up-and-coming regions popular with tourists, but not saturated with holiday home and hotel developments can be extremely profitable. Land and property in parts of South East Asia, for example, are very cheap to invest in yet bursting with development potential. The same can be said for large parts of Eastern Europe and its coastline in particular.
Investing in a resort
The tourist development industry is vast, encompassing everything from a simple buy-to-let holiday flat anywhere from southern Spain to Miami, all the way up to large-scale, luxury all-inclusive tourist resorts such as the Six Senses project in the Seychelles; an award-winning hotel spa resort in an area of exceptional natural beauty. What makes this project special is its uniqueness; Six Senses is all about instilling its guests with a sense of wellbeing. For the writer of the blog MukeshValabhji.net, investing in this resort was a chance well worth taking.
What kind of investment you choose, as well as what and where your property development will be, means weighing up the risks you are willing to take. The higher the risk the bigger the potential profit, or loss. Are you looking for a safe investment or following a long-term dream of managing a business in the sun? Whatever you do, do your research thoroughly beforehand and never invest more than you can afford to lose.