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When investing overseas, research the market’s potential, choose your investment provider Wisely and consider how hands- on you’ll be, advices Elliot Vure
When investing overseas, research the market’s potential, choose your investment provider wisely and consider how handson you’ll be
Volatility in equity markets, the devaluation of the yuan, cooling measures and falling prices in the Hong Kong and Singapore property markets have all made the investment landscape more difficult to navigate. For many, chasing returns is wearing their patience thin.
In the search for stability and higher yields, investors have been considering offshore markets that provide portfolio diversification, as well as returns, in a strong and dependable currency.
At Select Property Group, we’ve even seen an 835 percent increase in Asian investors (a large proportion of whom are Singaporeans) buying British real estate since 2010. But for those not already reaping the benefits of overseas property, how should they best tackle such an important investment?
1: Research and understand where future growth will come from
Knowing which markets offer investment potential for the future will help to ensure your investment remains valuable in the long term.
The golden rule of property investment has always been “location, location, location” and while numerous Asian investors have been turning to British property, for instance, many have discovered that London no longer stacks up from an investment perspective. Savvy investors have instead identified a new location: Manchester.
Famous for its music, football teams and industrial innovation, the city is one of the UK’S most under-served residential property markets, where a significant amount of investment is now being made into transport, education and commerce. Investors in the know are already securing assets to ensure the highest returns ahead of the growth curve anticipated for the city’s property market.
Another growth opportunity has developed over the past couple of years, thanks to a younger generation who value the freedom and flexibility offered by renting, including the ability to take on international employment assignments. As a result, a new type of product has emerged: Build-to-rent property. This sector provides purpose-built accommodation with the same level of quality and service that tenants are now demanding from their rental accommodation. In the UK alone, the sector is estimated to be worth £50 billion by 2020.
2: consider how involved you want to be with your investment
Investments into any tangible asset located overseas will require a higher level of energy to manage than those located in domestic markets. Investors should be fully aware of what is needed to maintain and ensure the longevity of their investments.
For traditional buy-to-let landlords, the management of property can be extremely time-consuming. When halfway across the world, issues with facilities, payments and securing tenants becomes a full-time job.
Many international investors prefer the option of a fully managed solution, inclusive of costs that offers a transparent rental yield. These solutions are offered by the developer or investment provider, who will tenant your property and maintain it to the highest standards, before deducting management costs from your returns. As an investor, you simply sit back and enjoy your returns.
3: choose your property investment provider carefully
Property is a long-term commitment and investors should be as wise about who they invest with, as who they choose to marry. Check if your investment provider has in-house expertise and a dedicated investor relations team who can provide tailored advice and service to suit your needs.
Also ensure that any property investment company you choose has a proven record of delivering tangible investor returns in a number of established markets. The best returns are found through properties designed for end users, in locations of high demand and low supply. It’s important to take the time to discover whether the properties sold by a provider meet these criteria to be sure of sustained yields.
A keen understanding of new and future growth in overseas markets will help to set investors on the right path for a high yield investment, while the right partner will underpin the longevity of any property. With these elements, those with a nose for investing can take advantage of the benefits overseas property investment has to offer.