Is real estate worth the investment?

There are many good reasons why you might be looking to invest in real estate in your retirement years. Property gives you security and is functional, giving you a place to live in all or part of the year. Of course, with property and real estate – whether it’s a residential home, commercial property or a piece of land – location is everything. Where your property is located will determine its cost and investment value, and, of course, whether it’s somewhere you would want to spend time yourself. If part of your investment plan is to let your property as a holiday home, or indeed to lease it as commercial premises, then location is also crucial.

Looking abroad

Given the above considerations, your best bet might be to look outside the UK. With the pound currently strong against the euro, many British pensioners are buying property in Europe, either as buy-to-let concerns, second homes or permanent residences.

There’s no reason just to limit your choices to Europe, however. Developing economies are very much worth considering if you’re seriously thinking of buying real estate as an investment. This is for the simple reason that as these economies grow, the value of land and property will increase, especially in the major cities or in popular resort areas. China and Brazil both have emerging middle classes that want luxury homes, cafés, restaurants, hotels and retail outlets to serve them. As economies strengthen, construction work increases, and land and property increase in value.

Building a portfolio

Global property investment can be the beginning of a serious and rewarding investment career. M1 Group began in property and construction and is now a major global investment concern, comprising companies that specialise in travel, energy, fashion and consumer goods, among other enterprises. Property still remains important, however, and M1 Group remains very much in the family, with founding brothers Taha and Najib Mikati now joined by Taha’s son Azmi T Mikati (see https://www.bloomberg.com/research/stocks/private/person.asp?personId=23953362&privcapId=23067277), who is the Chief Executive Officer and Director of M1 Limited. Even if you don’t intend to develop your portfolio on such a grand scale, property is still an investment that can be handed down to your children or grandchildren.

What to look for

It’s crucial to buy at the right time. If you invest during a boom when prices are high, then you could see the value of your investment depreciate as the economic cycle moves into its low point. While the value will probably recover eventually, you might not want to wait that long. Look for countries where prices are low but have the potential for expansion. Also consider whether the government offers tax breaks to overseas property investors, and check what local rules and fees apply to those buying real estate from abroad. There may, for instance, be strict guidelines as to how many months of the year you can be in residence.

No matter what economic or political turmoil is affecting the financial markets, real estate is a hard asset that will always retain an intrinsic value. While stocks and shares can end up worth less than the paper they’re written on, real estate is a finite resource that will always be in demand.

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