Now I know in the past I have discussed the pros of investing abroad, and I do believe that there are profits out there, but when you break each of these markets down into their fundamentals, investing in the UK has many more benefits. Let me explain.

Take the term ‘property investment’. If you were to search for it on the web, you would come across a lot of press stories telling you how profitable investing abroad can be. Their punch line? Falling house prices.

Yet here is the thing. In the UK we are going through the exact same property price falls. It is happening everywhere. So whilst the press may be all doom and gloom about the UK property market, the truth is the whole global economy is feeling the pinch…

The only real discernible difference between them is that when you invest abroad, you do so with greater financial risk.

Their land laws for example, greatly differ from our own in terms of the way they approach and broker their property deals. Their legal fees are different. So as you can see, if you are not careful and do not acquire the right awareness before you invest, you could be setting yourself up for a financial loss should something go wrong.

Then on the other end of the scale, there is the conversion rates between the pound and the Euro.

In normal climates, the pound is generally stronger than the Euro – meaning should you choose to invest abroad you would be getting more value for your money. But in the current financial climate, the scenario is much different – the Euro is stronger meaning if you are not careful you could be investing more money than you think you are.

See what I mean? Whilst investing abroad does have its perks, choosing to invest in the UK can offer you a much quicker returns, plus the security of knowing exactly where you stand law-wise.

Wendy xx

That is why I have found the Telegraph’s recent report about the FSA’s plans to cap mortgages alarming. It is absolutely the step in the wrong direction for improving the property market.

At the moment this report is still all speculation, but if it were to happen then we are set to face even tighter lending restrictions.

Maybe I am over-reacting, but I don’t think I am. Here is what I mean: supposedly the FSA want to restrict how much lenders can lend to homeowners by allowing them to borrow only 3 times their annual salary.

Now on the one hand this information is arguably good news for professional landlords like you and me as it will result in more homeowners choosing to rent instead of buy, but this change can affect us as well.

For the majority of us we use our own money to establish a property investment before using the equity we accumulate to invest in another. So if this action does take place any one looking to make a credible living through property investment could have a harder time doing so if they are restricted in cash-flow.

Hopefully the FSA will see sense before they implement even more restrictions onto the property market. But if anyone else has got an opinion of this please let me know.

speak soon

Wendy xx

PS. Here’s the story I was on about – http://www.telegraph.co.uk/finance/personalfinance/5002083/Proposed-cap-on-mortgage-lending-by-FSA-is-suicidal-say-property-experts.html

I personally have always preferred to invest in the UK, but the TimesOnlines recent story about global property price falls has given me a new perspective on the prospective profits that can be earned from these types of properties.

I know, I know… every country has got their own property laws detailing what is necessary to invest. But… if you were to take the time to gain a firm grasp of these laws, the instant earnings you could generate from these locations could really be worth your time.

Take these following figures supplied by the Timesonline. Here they have examined at least 7 locations, all of which can offer you instant earnings due to their affordability:

France: In Normandy, Brittany, the Dordogne and Cote d’Azur all their properties have fallen in value by 7.5%. But as a country as a whole properties in France are down 25%.
Spain: Properties across the board are now 20% cheaper than they were in 2007.
Italy: Look in Tuscany and properties which originally cost 700,000 euros are now 400,000 euros. Overall though, investors can expect to see savings of 20% in their investments.
Manhatten: Properties across the State have fallen by a minimum of 20% in value with some falling as high as 30%.
Florida: Some of their properties have experienced discounts of over 50% making them an ideal second home location.
South Africa: Prices average out at 10-20% below their peak value in 2007
Dubai: Following their 6 year property boom, you can now invest in Dubai at 75% of the properties value.

I know these figures shouldn’t be that surprising. After all we are in a global recession, but the similarity in price falls between there and in the UK, makes any one of these above locations an appetising investment opportunity.

The only thing you have to be careful with here is their laws. Once you know that and are confident you can find an all year round tenancy, then there is the potential to invest. A property that for example is only in demand for 4 months of the year isn’t worth the time. To truly make it work you need a tenant to fill the property for the whole 12 months.

Anyways this information does provide an interesting twist for anyone looking to broaden their horizons in property investment. It is certainly something to consider.

Wendy xx

PS. If you are interested as I am in this story, here is its link: http://property.timesonline.co.uk/tol/life_and_style/property/overseas/article5858851.ece. Enjoy

God I feel like 20 questions recently, but I have got to ask if anyone else has read the property investment savings accounts piece?

Well I know I have and I was shocked. It really put things into perspective for me.

Let me explain.

In the article they struck a direct comparison between the impact the 2.5% interest rate cut has had on property investment and on savings accounts. And it made a really valid point.
In their example they took the Halifax’s 6% interest rate and compared it a monthly repayment on a property worth £100,000.

Take a look at this:

Halifax 6% savings rate: put £100,000 into the account and you would make a £6,000 profit in interest in a year. 3 bed property worth £100,000: bought at a 6% rate for over 30 years it would cost £599 a month. Now equate that the average monthly rental for this type of property is £801, and people could make £9,612 a year (and that’s just from one property!).

Compare them this way and property is by far the better way to boost your savings.

I know that the Halifax scenario looks pretty good, but who do you know who has got £100,000 lying around to put into a saving account? I know I don’t know no one, and I’m an investor!

But here is the other thing – and I am sure you have heard this one: the Bank of England have been rumoured to be planning to cut interest rates down to 0%.

If that’s true, it will spell great news for tracker deals and fixed rates, but savings accounts… ouch! You’ll barely be earning anything.

So what are we to take from this information? Well, I know I am now more personally motivated to get stacking and investing. If my savings account cannot offer me profits, I’m going to let my properties do it.

Anyways, I thought I’d fill you all in and see what you thought.

If anyone else has got an opinion on this, please let me know. I’m in two minds on whether to give up my savers account for the moment and put it into my properties…

Drive around the area, up and down the street -
do people look after their property?
People that invest money in their property will help sell your property, buyers or renters will not want to rent on a street that doesn’t look inviting.

have they made alterations?
If the properties on the street have had work done to them that means that any work that you would like to do which you would need planning permissions or building regulations for are more likely to be acceptable to the council.

is the street full of home owners or renters?
Knowing who predominantly resides on the street is important, if you are after a family home to renovate and sell on and the street is full of students who rent then you are on the wrong street.

You know how much the property is on the market for, you know what you want to achieve from renovations but how much can you afford to pay for the property including your renovation costs, fees etc.

There is a website called Mouse Price that can help you with this all you need is the address.  You can use this website to look at general house prices on the street, what properties have actually sold for on the street, and local information including crime stats, amenities and demographic data.  The main thing I use the site for is looking at property prices on the street, it will tell you exactly how much someone paid for the property and when.  Make a note of the house number and drive past and take a look.  This will give you a good indication of what is achievable on the street.

Then you can answer the question is this going to be a cheap property investment with a great margin.