CYBERMOUSE
Its valid for people to have an opinion on which areas represent the best investment.
Just as with stocks and shares, there will be people who chose well and those that make a loss.
So we cant all slap each other on the back and say every investment nation is equal in terms of prospects for future returns.
We must therefore carry out detailed research and come to conclusions.
Without wanting to sound pious, I find most people dont really understand investment. For example one said to me the other day he had bought in Bulgaria. I asked him what the rental season was like and he said he got 9 weeks rent.
This tells us his property generated no income for 43 weeks. He spend £50000 on the property and his rent was £1800 for the year, minus costs such as Accountants fees in Bulgaria and the UK so his net return was £1000.
So £1000 return on a £50000 investment. Keep in mind he raised the £50000 against his house in the UK so the mortgage interest will have cost about £2500 pa.
That means he has made a loss of £1500 pa.
He cant sell the place on as there is NO EXIT STRATEGY.
This is because people buy the new developments not his 'second hand home'.
Lets say his property double in value in 5 years.
He will have made £50000, BUT his loss each year is £1500 plus he will have had buying and selling costs of about 20%, so he is left with £32500.
Lets say he is taxed at 40% (a captial gain of this size will mean 40% tax) so he ends up with £19500.
Thats not a good return but is typical.
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