This is a very sad post which again brings home the dangers of investing in overseas markets.  It involves the purchase of a property in Spain which seemed to go to plan, with all of the checks carried out, etc.  Unfortunately between agreeing the deal (and settlement) and delivering the paperwork to the new owners, the sellers took out massive loans against the property, with the new owners receiving numerous visits from debt collectors within a matter of only a few weeks.  It appears this may be a flaw in the Spanish system, with paperwork taking up to 30 days to be registered leaving the potential for such heart breaking fraud. 

Beware when buying a Re-Sale Property in Spain

While many people in the UK complain about the way the property market is run, when compared to many overseas markets, there is much greater protection.  A quicker delivery of paperwork is paramount to the success of any system, and the UK seems to have one of the best.  While legally the UK couple who bought the property in Spain may have a moral argument against action by the lenders, what are the chances of the fraudsters being caught? The buck will probably stop with the new owner, and research has shown that this is not an isolated case.  As we see many new markets open up for investors, do not forget that these are also new markets for the fraudsters!

Am I Too Late for investment in Cyprus?

Initially a down beat post on the property market in Cyprus, there are some great points about the North South divide, and the potential for ownership issues for property allegedly stolen from the earlier inhabitants of the North of the island.  The post seems to concentrate on the South of the island, an area which is way ahead of the North in terms of development.  There are a number of interesting parties who have posted detailed pros and cons about property in Cyprus, giving a good balance to the various arguments, although there does seem to be a distinct lack of comment about the performance of the Northern Cyprus property market.

While often a difficult market to predict, Cyprus most definitely consists of two sub markets which are very very different.  The South has always been well ahead of the North, which for years had been cut off from the major countries of the world.  The opening of direct flight routes and other transport mediums have had a marked effect on the North of the country.  While there is a strong argument that the development of the infrastructure has not kept pace with the growth in the economy (mostly tourist based), there are signs of a catch up.  A recent lull in the property market has given many a chance to consider their position in what is a very interesting market.

Advice Required - Selling Property in Portugal

This is an interesting post made by “fbillson” about a buyer who is looking to acquire his father’s property in Portugal.  While the initial details of the transaction sound ok, he then goes on to say the buyer wants to meet in Belgium (why?), and pay half cash and half cheque / bankers draft.  This is when the alarm bells should really start to ring.  While “fbillson” is obviously an intelligent man, he is quite rightly asking for advice from fellow members of the forum - something which many are only too willing to offer.  A nice example of the knowledgeable assisting the less knowledgeable.

As they say in business, if it seems too good to be true, it probably is.  There are a few issues to consider here, starting with why would you want to meet in Belgium to buy a Portuguese property? Why would you want to settle a transaction  with half cash and half cheque / bankers draft? Many people are not aware, but there have been numerous instances of bankers draft being forged, or express clearance cheques being initially cleared, only to be rejected a couple of days later.  This sounds very much like the old eBay scam where “secure” bankers drafts are used to settle a transaction, only to find you have sent the product and the cheque has bounced.  Identification theft is also a real possibility with this type of “transaction”.

High yielding property 8% and above

While this thread started back in March it is still growing in length and offers some great views about the rental yields available in overseas markets.  While the yields vary markedly, there are also other factors to consider such as the underlying property market as well as the potential currency risk if converting from sterling.  The general consensus seems to be that a yield in excess of 8% is possible, although if you are looking at newer countries which have joined the EU, you may have to leave some of the “hotspots” where property prices have risen with yields reducing, and look at less developed areas.

I think the main risk for any UK investor is the currency risk, which can easily wipe out a potential impressive return from an overseas market.  Then again, when you consider that sterling is flying high against the dollar and many of the smaller nations often have a link to the dollar, there is potential to use the current exchange rate to you advantage.  By exchanging into a local currency, hopefully with a connection to the dollar, you can lock yourself in at a higher level, invest in properties with impressive yields and hopefully take advantage of a rebound in the dollar in years to come.

Buy-to-let property

This recent post by “Jordan” about buy-to-let has attracted a fair amount of comment over the last few days, with differing views as to areas of interest, how much you need to spend on your new property and which market to go for.  While we all know about the traditional markets of universities, colleges, etc, the quality of tenants can be a little low, with yields often lower than average.  There was an interesting comment about the asylum seekers market,  which has the potential to be a new thread on its own.  A fairly new phenomenon to the UK, this is a market which will only grow and grow in the foreseeable future.

As well as the asylum seeker market, we have seen a massive increase in the number of European residents moving to the UK to take advantage of European cross-border employment legislation and other facilities.  This has opened up a massive market with large pockets of immigrants in Scotland and Southern England to name but a couple of areas.  Scotland has a large population of Polish workers, with a number looking to make as much money as possible then move back to Poland for a better life.  This has created a large rental market for overseas workers in Scotland, with useful yields and a constant flow of potential tenants.