Property investments in emerging global markets for real returns

With over 1 million households now living in buy to let properties and the assets of this sector worth over £120 billion (Association of Residential Letting Agents 2006) it is no wonder that thousands of investors have included buy to let properties are part of their portfolios.

However with the average total returns on UK buy to let investments at 13.3% (Paragon Mortgages Nov. 2006) are there other property investment opportunities available elsewhere for the sophisticated investor seeking higher returns?

Globalisation has meant that the world is now our back yard. Investors are no longer limited to their own region or country and are able to take advantage of exciting opportunities overseas. The emerging markets of Eastern Europe for example have vastly opened up since the fall of communism, welcoming foreign investment and supporting development to boost their economies. It is in countries such as Bulgaria and Romania, EU members as of 1st January 2007, and Croatia and Montenegro, who are expected to join by 2010, where interest in property investment is high.

The population of new and proposed EU joiners is massive, 24 million in the 2004 joiners and 30 million in 2007. The EU investment being directed to these countries will help to raise local incomes and that, combined with the expected deregulation of mortgage laws, will allow nationals to fulfill their hunger to upgrade from communist to private property ownership. In addition to this there is significant interest from foreign nationals, holiday home owners, expats and international companies, in purchasing property in these countries for both capital gain and rental income. But can you achieve higher returns than in the UK?

The answer is yes but the key is to invest at the early stages of a project, as a joint venture partner. It is widely accepted that the significant returns are made through property development itself and so by coming in at the early stages of acquiring land and seeing the project right through until completion and sale will give you a real share in the developers’ profits.

An example of such investment opportunities are the 4:Property Projects operating in Eastern Europe including Bulgaria, Croatia, Montenegro and Romania, as well as other active markets worldwide. Managed by experienced investor Chris Howard these ‘hands off’ projects offer a minimum entry level of just £10,000 for sophisticated investors, projects have a duration of 1 -3 years and expect annual returns of between 20% - 60% depending on the project. Each project is researched in great detail and utilises 4:Property’s local contacts and investment experience to source a variety of locations including ski, capital and tourist areas. Chris Howard comments, ”The 4:Property Projects, suitable for high net worth individuals, allow each of us to invest directly in profitable developments in active property markets in a straightforward and transparent manner. As a joint venture partner, investors are able to enjoy high returns without the hassles of hands on property ownership making them perfect for the sophisticated investor seeking to diversify their portfolio with property investments overseas.”

Chris goes on to say, “The concept is particularly interesting because the investor can benefit at any or all stages in the project: land purchase, achieving increased value through gaining planning permission, share in development profits or purchasing completed properties for later appreciation. We always encourage investors to follow good practice and spread their investments. To be more certain of good returns, we suggest investors consider placing funds in a number of separate activities or projects, whether with us or other providers. That way the broad investment portfolio allows you to rest easy and not be over-dependent upon any one investment; it is just the common sense approach.”

If you therefore are considering diversifying your portfolio by investing in property consider the opportunities to invest in active and emerging markets overseas. In a recent survey by 4:Property of 50 individuals interested in property investment, 71% said they would be comfortable investing in emerging global markets and 37% already owned a second property overseas.

For more information, visit 4you.uk.com.