More than 60% of property investors buying overseas said that they had received a higher return on investment than they had expected according to a recent survey conducted by Rightmove Overseas.
Nearly half of all the investors surveyed said that high rental yields were the most important factor behind their decision to purchase an overseas property. Timing is crucial in terms of getting a good return on investment when buying overseas so which countries did investors say they would be looking to invest in next year? Below are the top five countries of choice for the overseas property investors who responded to the survey:
1. Spain
Good weather and short flights keep Spain as the number 1 destination with UK holiday makers. That combined with property price reductions of up to 50% compared to 2007 in the South and East coastal regions and its clear why investors are are jumping in now, before the economy improves and property prices begin to increase once more. Properties in the Costa del Sol and the Costa Blanca seem to be the most sought after with Rightmove Overseas receiving an average of 500,000 searches each month for properties in those regions alone.
2. USA
There are reports that over 2,000,000 homes were repossessed by the USA banks in 2012 alone following the global recession. This has caused a buoyant rental market in the States and provided investors with opportunities to by tenanted properties with high projected yields. Investment properties in Detroit and in some counties of New York are a good example of this. In fact following the governing council of Detroit filing for bankruptcy in July, Rightmove Overseas received a 243% increase in searches. Meanwhile, properties close to Disney in Orlando continue to attract investors looking for good returns from holiday makers.
3. France
Its close proximity to the UK and easy accessibility has meant France has always been popular with Brits either buying second homes or permanent residences across the channel. However, schemes such as leaseback are an increasingly familiar way of buying French property which may be attracting investors. With the leaseback opportunity, investors can buy the freehold of the property but then lease it back to a company who will let it out (for holiday lets) for them. There are many new build opportunities in the French Riviera that are available through the leaseback scheme.
4. Greece
The economic issues in Greece seemingly have not deterred bargain hunting investors looking for opportunities in the holiday rental markets. Searches for properties in Greece increased 60% year on year on Rightmove Overseas with properties in Crete as well as the Ionian and Aegean Islands attracting the majority of the interest.
5. Italy
The short term (holiday rental) market is strong in Italy benefiting from both international and local tourism while similarly to the other countries in the Mediterranean the Italian property market has suffered and prices have dropped due to a faltering economy. Longer term investment opportunities are common in Italy if investors are looking at renovation projects, especially in regions such as Abruzzo. In addition, any potential investors will be boosted by the news that on the 1st of January 2014 the Italian government is reducing the Land Registry Tax on a second home purchase by €900 for every €100,000 of the sales price.