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Originally Posted by rjbevan
Thanks for all the advice. I really appreciate it. Is Berlin the best city in terms of rental return on the value? Does anybody know of anywhere where the rental return is better? It's an income I'm looking for, any capital growth would be incidental.
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In E Germany yields of 8% + were available, however now a more realistic yield is 5 - 6% as a result of a big influx of investors.
Ive looked at just about everwhere on the planet for the fabled yields you mentioned but have found that fundamentaly 5 - 6% applies everywhere.
A freind of mine who like me had invested in Germany and Morocco does achieve 15% but to so do he lets rooms in the UK on a cash basis and has to be hands on 24/7. He also has to shall we say 'skirt' the rules a little.
To be honest Im not sure I would go to all the bother of buying abroad in order to achieve a better yield than the UK offers as other hidden costs such as airline fares and translations will eat into the bottom line.
Even if u do find a high yielding zone you can be sure investors will spot it and the yield will quickly tumble to 5 - 5%.
BTW, shares in UK 'Dawnayday Treveria' which solely invest in German property just paid me a 5% dividend in thier first year trading.
Im now also buying a villa in Morocco on a site tipped to become the next St Tropez. I always holiday in villas and I can tell u well located property commands very very high rentals. Even a basic villa in Menorca or Sardinia (in non chavvy bits) will set u back £1000 per week absolute minimum, although £1500 is more like it.
2 bed Appartment built right into islands within the golf are typically £100000 but keep in mind is likely to be one of the best resorts anywhere in the Med, so I think prices will rocket, in fact I cant see people wanting to sell so supply will be very restricted.
Mortgages are comming on stream. Big British prescence so on - going management a lot simpler than in say Germany.
I expect this new site in Morocco to be year round as it has Olympic sized sports complex, the biggest marina in the Med and three 18 hole golf courses all in the one complex plus shopping centres etc etc.
The developer has declined a rental guarantee of 6% as they think they will be able to secure 8% yield. They are in negotiations with James Villas as well as others.
Ive no idea what the rent will be but the Government predict 500000 visitors per year by 2012, yet there are only 3000 private properties and no more building allowed for 15 years. Income tax doesnt apply for first 5 years. Multiple on site rental agents.
Some property here is almost completed (Fadesa built).
I like the fact you pay 40% now and the balance in 2 - 3 years time as your relatively low capital input is exposed to capital growth based on the full value now.
Im thinking the yield could be pretty hefty, but as ever no guarantees.