What is the current best overseas investment for rental returns?

[Investy]

Soup

I really spent quite a bit of time considering the CVs and to this day Im still unsure.

On the plus side is the weather and pristine beaches.

On the down for me were the low lying land, lack of robust state controls and lack of accesable legal redress, and most of all at that time (2 yrs ago) the developers did'nt give me confidence - I was concerned they could just dissapear with my money and the state officials would be powerless or worst still coniving.

[The Soup Dragon]

Thanks for the response Horizon.

Was interesting looking at the typical paths of the hurricanes – starting as tropical storm / cyclone, passing close to Cape Verde, and developing into full blown hurricanes by the time they cross the Atlantic. Can’t say I’m sold on the idea of them always missing Cape Verde, but link has appeased my concerns to a great degree. (Low probability of being hit and lower impact if hit.)

I’m skeptical about forecasted house price inflation you presented. Prices simply can’t rise by an average of 20% year on year for a prolonged period of time. Of course, most considering buying will do their own research as to where they feel prices are going.

Investy:- It is easy enough to identify areas where the land isn’t too low. I believe Sal is fairly flat, but you shouldn’t have much problem finding developments with decent elevation on some of the other islands. I’d have thought Santiago would be the pick in the long term. (International airport, capital of region, more culture than Sal.)

There’s a little bit of me that wishes I had spotted my favoured development in Cape Verde earlier. I think I would have taken the plunge if any of the front line golf properties had been available and the pound strengthening against the dollar would have reduced the cost for me. Still, most of us have kicked ourselves at some point for talking ourselves out of what were very good opportunities. I probably won’t consider Cape Verde further as feel the strong appreciation has passed and I don’t want to over extend myself.

[FJCOM]

I'm becoming an Investy fan.

[Horizon Property Group]

Investy

Sorry to read that you did not have the confidence in the developers 2 years ago to buy in Cape Verde.

The islands are VERY economically and politically stable since gaining their independance from Portugal in 1972. All their laws and buying processes are still based heavily on the Portuguese legal system. All contracts of purchase are drawn up in Portuguese and English making them easily understandable for English purchasers. However as a company we recommend that all clients use a lawyer and we highly recommend Neville de Rougemont as they are one of Portugal's largest legal firms but for English clients the great benefit is they have an office in the UK and Sal, Cape Verde. Before instructing a client to sign their contracts they will have performed all the necessary checks to make sure that the developer a) owns the land b) has the necessary licences c) that the developer is sufficiently cash rich to be able to complete the project. In some cases the developers offer bank guarantees or payments can be made to a lawyers escrow account. So sufficient safeguards are in place for prospective purchasers to feel safe.

At the end of the day you would not buy a property in the UK without using a lawyer so why do it abroad...

[Investy]

Soup

On the CV price inflation I think the best comparible would be the Caribean / Bahamas.
A beachfront property in these islands will tend to be very highly priced, certainly in the Bahamas you would be looking at a minimum $700,000 if the beach is good and even more if you add in golf.

As ever comparisons are very hit and miss.

The trick would be to spot the zones that will appeal to the rich - so the equivolent of say the British Virgin Islands, The Caymans, Abaco, Turks & Caicos, Barbados, Anguilla, Great Exuma etc

I was highly recommended to buy a plot of land on the rocky shore of Great Exuma in about 2004 for $140,000. I went there and then talked myself out of it. I checked about 8 months ago and saw the exact same plots (none have any advantage over one another) had risen to $800,000 - grrrrrrr

[Horizon Property Group]

Dear Soup Dragon,

Glad you liked the information about the hurricanes I have always used this info for people with these concerns as it is very informative.

The figures I quoted are official government statistics for the years past since development hit the islands and their forcast for the future. I know it seems incredible that prices will rise by these amounts but the government are confident in this. Investment in Cape Verde is long term not short term as it has been in the past here in the Canary Islands. We don't recommend anybody to buy in Cape Verde with the idea of buying today to sell tomorrow. There is money to be made but by buying and sitting on the property for 5+ years, you have 2 years for construction and then 3 years where the property can and would be rented to give a good return on the investment before then looking to sell on.

Land too low - I agree with your comments to Investy, the islands are similar to the Canary Islands in that the landscape is different on each Island. Sal is very flat but has incredible beaches, Boavista is similar although there are a few higher parts but the beaches here are the best of the islands. Santiago is similar to Tenerife in that it's centre is mountainous, although not as high as Mt Teide, giving dramatic landscapes and variations. Also as you point out Santiago is the capital and because of this has more culture. However Sao Vicente is one of my favourite islands, although it is a small island it has beautiful scenery and again beaches. The culture here is second to non and a great place to meet the locals and mix with them.

Sal has had an international airport for many years and was the first in the islands, Santiago's international airport opened at the end of last year although currently all direct flights from the UK are going to Sal. Boavista's international airport is now finished and only waiting for it's relevant licences. Astraeus expect to include this island in it's schedule from the UK by the end of this year. The airport in Sao Vicente is also very near to being completed to international status and they hope that sometime next year direct flights from the UK will arrive.

[Horizon Property Group]

Dear Investy,

Glad I am not the only one that missed out on land, about 10 years ago same thing happened with Cape Verde, we were offered beach front land at approx € 0.50 m² today that same land would sell for around € 2,500 m² if it was still available...

We tend to promote the islands as the new Caribbean into the UK market because they are the best example, weather, beaches, sea and people all very similar. But the CV islands are 4/5 hours closer by air.

My wife and I have spent a lot of time in the islands over the past couple of years on business and I have to drag her back to the Canaries everytime kicking and screaming, she would move their tomorrow but unfortunatly for me and the business it is not viable....yet.. We got married in the Caribbean on St Thomas and go their every year for our anniversary and she still prefers Cape Verde, mind you she hates flying so this could be one reason.

[Goldberg Global]

I like 13 years at 8% at banyan you get 104% back on your investment.

an important point my clients made were that over time money depreciates in value so being tied in to a guaranteed return investment sometimes is not the only way to go. the truth is it is easy. The problem is nothing in life is easy if you want to make money you have to work at it.

[Investy]

Horizon

I've had my eye on another small group of islands South of you which are as yet un developed. PLEASE PLEASE CALL ME IF YOU HEAR OF LAND THERE FOR SALE.

The islands are known as SAO TOME.

Very poor just like CV was not long ago, but proper tropical islands.

The Americans have discovered oil there and have bought the rights to drill last I heard.

One guy from S Africa said he could get me land there but the price was really high so I'm thinking he was trying me for a sucker.

It's always been an ambition of mine to buy land way before anyone else has spotted a location and this is the only such candidate Iv'e found.

[ricardothered]

Hi

I am interested in the Berlin investments you have found - could you private message me with the details please?

Thanks

Originally Posted by Investy

Forget the Kent flat, your too late, all the easy money has gone and the B2L market is seriously crowded. Furthermore you should know many lenders have stopped lending on B2L new build property as there is mass over supply leading to high repossession numbers (ie whole blocks come to market all seeking tenants so rents are driven down). Buying new is also a mistake as you overpay for the 'new' factor hence there is often no capital growth for 2 - 3 years.

Rising interest rates makes the cocktail even more risky.

UK property does not pay for its self as you imply - I know as Ive recently sold my B2Ls. Work out the cost of your deposit (ie loss of potential savings interest or if you borrowed the deposit the cost of that borrowing), plus the mortgage cost plus your maiantainance, accountants fees, the odd repair or rat removal etc etc. You will find that you will subsidise the investment if you do your numbers properly and then remember there is 40% capital gains tax when you sell (unless you sell when you have very low income in which case say 25%).

The US venture has better prospects but you need to think like an investor. Holiday rents in Florida can be not worthwhile and I often hear the costs never end (pool stops working etc etc).
Better to buy in a US city such as Atlanta and get year round rent or Toronto (Canada) with underground lift access to avoid snow pile ups.

Or join me in Berlin where I am investing heavily. Its right on your doorstep and like London 15 years ago. Ive just found 2 bed appartments fully maaintained with 10 year Government rent guarantees in a nice green family locale for £35000 or so.