hi , little advice for my first investment

[george27]

Hi people. I have recently decided that i want to invest in property I need a little advice for my first investment.

Firstly im really undecided as to were to invest first, i have been sprawling the internet for a few weeks now lookin for the best investment oppertunities. At present i have a list of 3 places which im considering.
They are
Ras Al Khaimah UAE,
Sofia - Bulgaria,
Bucharest - Romania.

i came to a decision on these places due to speaking to property sellers of these areas telling me how good of an investment it would be due to high rentle yeilds and capital appreciation and that the areas are developing well but i would like a none biased view about these places if possible. I have a budget of around 70k - 80k for a property based on my deposit.
Which of these areas would you choose for an investment?
Would you choose somewhere else?
Also where will i find the best mortgage offers for these places, do any of the developers in these areas offer finance??

Sorry about all the question but it would be a great help if you could answer some for me and point me in the right direction.

Thanks

George

[Olly]

Hello George

First, please be aware I am a Licensed Realtor & International Property Specialist trained and affiliated to the world's largest real estate corporation.

I would warn against each of the countries selected for several reasons unless you are prepared to invest for a minimum of 7 years and, in some instances, longer.

Bulgaria, Romania & UAE have one important limiting factor for any serious property investor - exit strategy. Buying is (in the main) easy in most places across the world. However, realising one's asset and maybe profit, can be an elusive excercise for most inexperienced investors.

Yes, they all have another thing in common they're all low-priced. (Not that this means 'cheap' since everything is related then to the local market place not a foreigners perception of value.)

Bulgaria & UAE are grossly oversupplied or, have so much inventory about to come on to the market over the next few years, that realising a good ROI (Return on Investment) will be problematic in my view and experience of the global markets.

Romania is possibly the best bet of the three but corruption is rife and buying without 'independent' advice could prove a disaster.

OK, so now you've read the negative, please, please do not be put off. The secret is Due Diligence regard the target market / country and, then, the actual new-build project and its owner or, the resale house you intend refurbishing...or whatever. Promise this real estate business is fascinating and there are so many ways to make a good profit.

If you want a free guide as to where I'd be delighted to oblige and, 'NO' that's not via me, it's just that as a brand new member I believe I have to refrain from dropping names and websites onto the Forum.

Whatever you decide, take your time. Except!!! The GB Pound is losing value and this is forecast to continue so it is high time to open a forex account. You can fix the rate well in advance of changing currency. And, whatever you do, DO NOT use a High St Bank for this purpose. The average sum lost by a buyer using this kind of facility is circa GBP 7,500. Yes, they are that greedy!!! Again, you need to be careful even in your selection of forex operator but I'll willingly give you a heads-up on what to look for and what questions to ask.

Very best of good hunting to you...

Olly

[andyk2]

Hi George,

Whatever area you are looking at, it is far easier to get in than get out, You are going to have to consider where your future buyer is coming from and what they want to get from their investment.

If you are thinking of buying off-plan in Sofia and Bucharest, your end user is going to be looking at rental yields probably from the domestic market.

Ras Al Khaimah may have a more international market, but there will be plenty of competition after the same busimess.

Look at your investment strategy and decide what you want to get from your investment, and then what your end user (purchaser) will get from your property when you want to sell it on.

Think about it before committing to whatever your agent recommends!

Andy

[george27]

thanks alot for your replys, theres alot to think about with investment, it didnt even enter my thoughts about an exit strategy. i think i need to do a bit of research before i commit.

thanks again

[Investy]

George youre about where I was 4 years ago, and I can tell you there is so much other stuff that wont have occured to you. For example if you are seriously ill or die, what is the process for your guardians or next of kin acting on your behalf? Many countries do not operate anything close to what we Brits would consider 'natural law'.

The other posters are spot on about exit stratergy. You will find when it comes to selling agents will have you over a barrel what with you not being in the country so you ahev to 100% put all your trust in them. Many will want at least 10% fee to sell.

What about Tax? In Bulgaria you must submitt annual accounts to thier revenue? Dont for a second think the revenue will write to you in your mother toungue!

SOME POINTERS;

1) Absolutely understand your exit stratergy

2) Absolutely understand that if you die your next of kin may never be able to claim the asset, unless you had very robust legal help when you purchased. Same goes for getting funds out of a country - this can take years unless all set up up - front.

3) Think about how you will get the rent into the UK. Will there be currency exchange costs each time? Will you have to open a foriegn Bank account? How? Who?


In a nut shell I came to this realisation;

Only invest where everything is pre arragnged for you and where there is a ready demand from Brits (makes it easier to resell) and where English is generally used at least on the development.

Secondly only buy from recognised developers. Imagine trying to get a snagg list done by a one man band Bulgarian whos long gone.

The best I found was the Royal backed Saidia resort in Morocco about 60km from Spain. The developers even took the trouble to ensure all monies paid are pre registered with the Moroccan authorities to make repatriation straight forward. On site rental agents manage eveything year round. The development is massive and will have the biggest marina in the Med.
The King planned this from 1999 and his core commercial aim was to ensure the development is busy all year round.

Many exclusive very large dramatic resorts being built in Morocco so should be quite up market compared to Bulgaria etc.

[Goldberg Global]

Investy good comments.

Clear Entry, Exit strategy
Objectives to purchase. ie. why are you buying.
Financial Leverage, using other peoples money ie. banks.
Why these markets. It is not about cheapness more about value.
What is your investment strategy. Buy to Let, buy to hold, buy to sell.
Tax strategy. Capital gains, inheritance, Tax on income. Double taxation treaties.
Contigency. What if it all goes pear shaped, can I afford it to mess up.

This is not an easy thing, but once you start in the big sea, you will float or drown, but you will learn. You only learn by doing it and listening to professionals.

I must disagree with Ollie, in any market you can make money, if you buy right and sell right. To say Bulgaria, Romania or UAE, there will be deals in all markets, if you have the contacts and the skills to find them. And they must make sense to you.

ie. If you are buying at 50% below market price, and you sell for 25% below market price, you have good entry and exit points. So go with your instincts.

Good luck.

[Goldberg Global]

Sorry Olly, I can not agree on things

To quote - the secret is due diligence. This is not a secret, it is a matter of fact. Without research and labour, you are not going to get anywhere in any market.

[Olly]

Please don't take offence Goldberg Global...we'll have to agree to differ!!! 'Due Diligence' is of course a matter of fact for 'US' within the business but, for the new investor it is still very much a secret. (Believe you've accidentally overworked my motivation and explanation?!!)

Forgive me again but, absolutely nowhere on your website could I find a mention of Due Diligence Reports or Packs being made available to your customers. Why not?

I was very pleased to learn 'D-D' Reports are under serious consideration by the EU as a reuirement for ALL agents selling property to its Citizens.

I'm not trying to score points here even if it might appear so. As a professionally trained and qualified Realtor & International Property Specialist working with a division of the world's largest residential real estate corporation, I am ultra-keen to see this industry raise itself from the dark perception metered down via the media. Sadly, in many instances based upon true situations created by those regulation will help to remove - or at the very least diminish.

Global Person / Moderator / Senior Member...sincerely wish you good trade and a professionally rewarding year in 2008.

Bestest!!!

Olly

[geester]

I agree, an exit strategy is most important. A friend of mine purchased 3 properties in Bulgaria, then sold 2 to get some cash back for a UK venture and it became a nightmare, he finally got the money 4 months later than he should....

[Goldberg Global]

Olly,
That is a fair point, providing packs for our clients on due diligence, we advise our clients with facts and advice, and illustrate things. It is like legal advice, we can not recommend a lawyer as it is impartial, but we will recommend a chamber of global lawyers for them to choose.
With Due diligence surely as well as us, the client would do well to research where they are going to invest in, we discuss this and strategies and objectives, when you are well partnered globally , you can have topical discussions of whats hot and whats not, things are always changing internationally, so DD packs though interesting may not be up to date, the market and money is fluid, and each person is different so we tailor to our knowledge base and the clients requirements.