Investment Properties

Investment property is a term that can mean a many things to many people including;

• Buy and sell
• Buy to Let
• Fly to Let
• Buy, renovate and sell
• Second homes which can be rented out on short term contracts

All of the above investment property sectors represent capital assets that can be liquidated when the time is right. The freedom of choice is a major criterion for many investors, especially those who prefer to main in complete control. The decisions to buy, sell hold, improve, modernise, decrease or increase pricing and of course contractual obligations are yours.

By investing directly in real estate, investors need to be extremely knowledgeable about the local market, market trends, local competition, current pricing, occupancy rates in relevant sector and financial implications involved in the purchase as well as the on-going running and maintenance costs.

Partnering with a professional management company who understands the local market is essential if you do not live nearby. The last thing that any landlord wants is a phone call at 3 in the morning, but if you don’t have a management company, then you can expect that call every once in a while.

We all believe we understand the market, that we can read trends or know a bargain when we see one, but unless it is your primary occupation, the likelihood is that there are professionals out there who understand it far better than you ever will. Build a working relationship with professionals that you know you will require the services of and also ones that you may have the need for in the future. It is better to be prepared than be of the opinion “I’ll cross that bridge when I get to it!”

Investment property has created more millionaires than virtually any other form of investment. The majority of investment portfolios have a substantial proportion of real estate at its core, as over the longer period real estate has proved over and over to be an investment vehicle that can be relied on.

There are a few “rules” that should be considered and adhered to.

• Always pay at least 30% of the total cost when you enter a contract
• Never buy a property that you cannot afford to “cover” should you have low occupancy
• Aim for around 5-10% net return per annum if you are renting the property out
• Expect to hold the property for a few years, preferably at least 5 years
• Properties should be located where there is undersupply and high demand either immediately or within a short period
• Exit strategies should be viable

Each investor is an individual and has different requirements from their investments. Many are long term investors who are content with equity growth that can be released as part of a pension plan.

Take a look at our award winning beachfront The Coral Lake and Beach Resort in Brazil and see how you can take advantage of this capital equity growth market place

Others prefer more liquidity and demand “immediate” cash flow scenarios.

Investment properties can fulfil both of these principal demands, subject to careful due diligence and a thorough understanding of the local market.

This type of investment is ideal for armchair investors - who, after the initial due diligence process can sit back and let their money work for them -  is similar to being a landlord but without the aggravation!

Take a look at our upcoming opportunities in the USA and see why see why so many investors include armchair investments in their portfolios.