Location, Location, Location

Selecting the right investment property

Overview

The famous quote that property selection is all about “Location, Location & Location” is pretty much accurate. Here we review the process we use to ensure that you end up with the best possible property investment:

Having decided on what your investment strategy is with regard to Risk & Reward it is then very much down to location:

• High Risk with possibilities of High Returns
• Medium Risk with a more secure but slightly lower Return
• Low Risk but much safer and acceptable Return

(see also: investment strategy)

Location

Thankfully this planet that we live on is not a homogeneous place. There are differences in geographical features, weather, populations and attitudes to many social aspects of living such as religion, work ethic and family structures. The items that influence whether a particular location features high or low on a property investment “Hot List” are these:

1. Security
2. Economical Stability
3. Political Stability
4. Supply & Demand
5. Accessibility
6. Local Attractions
7. Weather

Research

Essentially you are looking at four areas:

1. What are the fundamentals that are going to drive capital growth
2. What is the level of risk in any given country, and is it over or under-valued?
3. Does the finance available, property prices, buying costs and rental yields make it financially viable?
4. How strong are the resale/rental markets?

Our Current “Hot” Locations

Low risk with acceptable returns

• United Kingdom – Major Towns & Cities and Costal areas
• Spain - Costa Brava, Costa de Luz & Murcia Area
• Portugal
• USA – Florida long term residential lets 
• France – Leasebacks in Ski Areas, Paris and South Coast
• Cyprus – Cypriot South

These are all suitable for holiday and retirement purchases rather than pure investments

Medium Risk with good potential

• Dubai – Commercial areas, International City
• Morocco – Cities and Mediterranean coast
• Egypt – Red Sea resorts
• Bulgaria – Ski areas and Sophia only
• Any Low Risk location above - where we can buy below the current market valuation, obtain a guaranteed rental period or include a substantial financial incentive

These are the locations where we make our personal investments

Higher Risk which may “fly or dive”

All locations where there is unacceptable risk for us to recommend an investment in property. This could be areas where we cannot see a viable rental demand and capital growth has been purely down to investors being influenced by speculative hype. Some locations can reach an unhealthy price level where a correction takes place as has been the case in much of the UK in the past 18 months. We may also have concerns about the financial, legal or political stability or a Country. This includes, in our opinion, beach locations with small seasons and many emerging markets. Once these locations obtain a higher rating in our due diligence research, we may move them into our medium risk category. This area is only suitable for the very brave who can afford an occasional loss situation.

NB. All views and opinions expressed in this website are solely that of the authors. Before making any investment, individuals are recommended to carry out their own investigation.