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OVERSEAS PROPERTY INVESTMENT

OVERSEAS PROPERTY INVESTMENT. Monday 18 th October 2004. Overseas Property investment. What it is Comparison v other markets The return The risks. Overseas Property. Too big to be dealt with here Snapshot only Need a working party Need professional advice WHY? Investment record

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OVERSEAS PROPERTY INVESTMENT

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  1. OVERSEAS PROPERTYINVESTMENT Monday 18th October 2004

  2. Overseas Property investment • What it is • Comparison v other markets • The return • The risks

  3. Overseas Property • Too big to be dealt with here • Snapshot only • Need a working party • Need professional advice WHY? • Investment record • No fun in investments • Loss of 5 members

  4. UNIT PRICE HISTORY

  5. FTSE 100 INDEX1999 - 2004

  6. UK HOUSE PRICE INDEX

  7. UK Average House Prices

  8. So what! • Re – mortgaging • Main driver of UK overseas property investment • Equity release in UK was £57bn 2003 • Coupled with – • Strong pound • Cheap flights • Desire to retire to the sun • Lower house prices in Europe • Mortgages down in real terms in W.Europe

  9. European Property Prices • Spain tops the property league • Up 18.7% to Jun 03, 17.2% to Jun 04 • UK, up 17.6% to Jun 03, 13.8% to Jun 04 • France 12.9% to Jun 03, 14.5% to Jun 04 • 650,000 houses in Spain now owned by Brits. • In 03, 40% of all houses built on the Costas were bought by Brits. • 1.4million Brits own properties abroad

  10. BUT: • Western Europe now represents high cost entry • Investment would need to be in new or relatively new property. • Entry level too high for CCCIC • Missed the boat ?

  11. Where • TURKEY – Mediterranean coast • CROATIA – Dalmatian coast • MONTENEGRO – Adriatic coast • BULGARIA – Black Sea coast • SLOVENIA – Adriatic coast • MOLDOVA – Black Sea coast

  12. Why would we want to invest • Jump on a bandwagon that’s still rolling • Anticipated growth rates of 20% + pa • If necessary could fund mortgage out of subs • Rental income, > £300pw would cover mortgage of £50k + maintenance. • Cheap holidays in the sun • In effect we would :

  13. Learn about property investment • Earn a handsome income • Have fun watching our money grow

  14. Risks • Collapse in property prices in W.Europe • Have a mortgage to fund in a sliding market • Political instability • Property security • Reliant on local management • Stability and longevity of CCCIC • And many more

  15. What would we need • To get in on “ground floor investments” • New or relatively new property • Coastal resort • Serviced by low cost airlines • Max. 3 –4 hours flight time • Sound legal system • Political Stability • Local mortgages ? • Maintenance services

  16. CROATIA • Very popular with Brits when part of Yugoslavia under Tito • > 1000km Mediterranean coastline • Av. Summer temp. 27 deg. • 2600hrs sunshine annually • In EU by 2008 – member of NATO • Beautiful girls • Houses now becoming expensive • Apartments start at c. £40k

  17. £17, 800 But – I concentrated on Bulgaria“The new Spain” • Among the cheapest in Europe • Joins EU in 2007 • 3 hours flight from UK • All major tour operators by 2005 • 220km of sandy beaches – 1700hr sun May to Oct • Last year property rose by 30% • Ski and beach resorts

  18. Why Bulgaria? • Cost of living one of lowest in Europe • Pint of lager – 40p, 3-course meal -£5 • Member of NATO • Currency stable and linked to the Euro • Predicting ROI 100% in 3 years • New properties start at £40k / less • Maintenance fees c.300euros per annum

  19. The problems are many • Apart from normal investment problems • How do we as a club make a purchase ? • How do we raise a mortgage ? • Should we form a limited company ? • Any volunteers for treasurer ? • How do we deal with new and departing members ? • Etc., etc., etc.

  20. Recommendation • Form a study group • Define Group remit • Group to report back in say 3 months • Invite UK Overseas Property Agent to address the Club • Invite Ivo Hesmondhalgh of Bulgarian Property Developments (BPD) to address the Club • BPD set to join AIM within weeks

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