Property Investment Strategies
BRAZILBrazil Guide
Brazil Property
Investment Property Brazil
MOROCCOMorocco Guide
Morocco Property
Investment Property Morocco
EGYPTEgypt Guide
Egypt Property
Investment Property Egypt
ITALYItaly Guide
Italy Property
Investment Property Italy
TURKEYTurkey Guide
Turkey Property
Investment Property Turkey
MALAYSIAMalaysia Guide
Malaysia Property
Investment Property Malaysia
International Property Investment
Why Invest in International Property
Property Investment Strategies
SIPPS
REITS
SSIA
International Property World
Why Choose IPW
IPW Due Diligence
Client Testimonials
Property Investment Strategies
Short TermIn contrast to equity investments, short-term investment in property can range from 6 months up to 2 years. The most common form of short-term investment is the off-plan purchase with the view to sell prior to, or just after the properties completion. A careful analysis is required to determine the viability of such a transaction.
1. Does the developer allow a transfer of the private purchase contract before the title deeds are in place?
2. What market conditions will exist within the sell off period and can the property or contract be liquidated easily and with the expected profit?
3. What tax implications and other expenses exist when the sale has been completed?
If the right conditions exist then investors have the ability to profit from the value of the entire unit having only used a small deposit. The following example outlines the mechanics of a typical short-term property investment.
Example:
Price of a unit purchased off-plan 100.000
Time to build completion 2 Years
Deposit Required 30% or 30.000
Annual property growth rate 12%
Value of property after 18 months at 12% pa = 118.720
Sale of Private Purchase Contract after 18 months with six months to build completion remaining for a profit of 18.720
Initial Investment 30.000
Profit after 18 months 18.720
Return on Investment 18 months 62%
Equivalent to a compound interest rate of just over 38%
Medium Term
A medium term investment in property could range from 2 to 5 years and would involve not only capital appreciation but also income generation through rental. The most important considerations would involve the potential resale value of the unit as well as the value of the rental market.
1. If the property is located in a tourist area then one needs to consider the strength of both the domestic and international tourist markets as well as the accessibility (direct flights etc.).
2. If the property is located in a commercial, business or urban environment then the continued and expanding economic growth in that area will be of the utmost importance in guaranteeing a high rental yield.
The following example outlines the mechanics of a typical medium term property investment.
Price of property purchased off-plan 100.000
Time to build completion 2 years
Deposit required 30% or 30.000
Annual property growth rate 12%
Final payment after 2 years 70.000
70% finance on the value of the property=70.000
Rental income at 8% to offset mortgage payments
Property value after 6 years (2 years building 4 years rental) =197381
Total expenses= 30.000
Profit = 167381
Return on Investment after 6 years =558%
Equivalent to a compound interest rate of just under 37%
Long Term
Long-term investment in property is generally considered to exceed 5 years and typically lasts much longer. Historically property prices have always increased over the long term, however, to maximize the return on a long-term investment there are several necessary considerations both political and economic that need to be factored into the decision.
| FREEPHONE US TODAY |
INTERNATIONAL Freephone Number 0800 011 2352 |
| Investment Guide Brazil |
| Download your FREE BROCHURE NOW |