Why invest overseas?

Following several years of spectacular rises in investment property values, the UK & Irish, as well as most Western European buy-to-let markets have weakened considerably.

Those who chose to continue to invest in the current markets are finding financing increasingly difficult since rental income is no longer covering their mortgages, and the capital gains of previous years are decreasing rapidly.
Experienced and novice buy-to-let investors alike are leaving the these markets and looking further afield at emerging markets such as Central-Eastern Europe. Such investors are not looking for a "place in the sun" - they are only interested in maximising their return on investment.
This investment option is still relatively new since it is a by-product of the European Union's expansion to the East and South of the continent.
Most investors have come to the conclusion that the market cycle in the West is at its peak, and the more sophisticated investor has already started moving his money into new markets – and in particular the emerging EU countries.
Many astute investors started buying there a year or two before EU accession, particularly in more developed cities like Budapest or Prague where real estate markets were relatively more mature. Prices in some cities had already increased by up to 20% in the year up to May 2004, however there is still a long way to go to catch up with Western price levels.

How do I start?

It can be confusing and frustrating getting to know to a new market. This need not be the case if you have a sound local base coupled with a thought-out investment strategy.
That is why one2one property was established. We demistify the whole process and help you to buy the property that will provide you with the highest yields. We will also help you to finance your property locally to minimise risk, and maximise your return on investment.
one2one property  was launched to address the lack of support for investors wanting to invest in the right kind of property in the right location.
Talking to us will introduce you to a choice of carefully selected properties that offer excellent potential both in terms of capital growth and rental yields.

Why finance with a mortgage?

If you are looking for maximum income from your investment then you will not gain much benefit from financing.
However, most investors are looking to secure maximum capital growth and will benefit hugely from a leveraged or geared investment. In other words, using a mortgage secured against your buy-to-let property will fund the majority of your investment, and the rental yield will cover most of the monthly mortgage costs.
This means that it is possible to use a very low initial down-payment to build significant investment returns.
Most of the mortgage monthly repayment costs are covered by the rental income from the property.
You may initially feel uneasy about 'going into more debt' by investing in property.
We work on the notion that there is good debt and bad debt. Good debt is secured against growing assets, such as property, where income from the asset covers the debt payments – and it dramatically maximises your capital growth prospects. An example of a bad debt is what is secured against an asset that reduces in value such as a car, which - unless it becomes a rare classic - will always reduce in value and delivers no income.

Why ‘City’ and not ‘Sun’?

Spain, Brazil, France, Cape Verde, Bulgaria, Croatia, Turkey, Morrocco... Day by day we see these locations promoted as the next smart investment location and the list goes on - and to a greater or lesser extent, these are all property 'hot spots' and therefore should be good investments.
But a property hot spot can rapidly go cold: so the question is, which ones are truly investment gold and which are merely the flavour of the month? Which is the best investment: a 'place in the sun' or a city apartment?
The answer depends entirely on how you define 'investment'.
A 'place in the sun' will often be a townhouse, a villa or a balconied apartment in a current 'hot' holiday location. For many, this will be the investment of choice since it is likely to be a lifestyle investment with the bonus of being rentable to tourists.
In our view, this is often where the term 'investment' is misplaced since the drivers for capital growth are seasonal. In addition, virtually every other property in the area is striving for rental business which invariably suppresses rental income yield.
That said, certain locations do offer a reasonable mix of capital growth potential and rental yield plus 'place in the sun' advantages - especially where there is a combination of low availability of building sites and rising demand for properties. Still, we will always question whether they are good investments checking if there is a ready exit - i.e. a live resale market.

Is it too late?

The focus on emerging markets is still relatively new and the good news is that it is definitely not too late to enter these markets.

Indeed, given the facts and figures in terms of investment and the low cost of entry at this time, it is clear that these markets will remain an outstanding investment option for some years to come.

There is pent-up demand in the accession countries for quality accommodation; EU driven economic reforms are creating a new middle class who are abandoning the communist-style concrete blocks for new modern apartment developments.

What are the critical success factors?

You want to be sure that the best possible conditions exist for excellent long-term capital growth along with sustainable strong rental yields at a minimum risk for the term of your investment.

Consider the following factors when choosing any potential development for investment:

What will drive up the price of property in the target location?
How sustainable is the capital growth and over what period?
What is the minimum capital outlay needed to secure the property (the less the better for maximum leveraged growth)?
Are local financing options available for foreign investors - and are the mortgage terms and rates favourable?
What legal structures are in place and does the development have planning permission and legal title?
Is the developer reputable with a good existing track record?
Will the developer offer an escrow to protect your money?
Will the property be easy to rent?
Who will deal with all the day-to-day tenant management issues?
Will the rental income cover financing and other costs?

We have answers to these questions for every development one2one property brings to market.

Would you like to know more about details of purchasing in Budapest?
Click here to send us an enquiry!