International property investment is an attractive option for wealthy individuals with a desire to invest funds in international markets. Concerns about economic growth and local market volatility have led many to seek offshore investments. Over the last few years, the South African Reserve Bank has relaxed exchange controls meaning individuals now have access to bigger allowances. This coupled with opportunities for steady capital growth in a stronger currency makes investing in international property really a no-brainer.

Many South Africans have over the last few years, enjoyed sizeable returns from property investment in the United Kingdom in particular. Its growing population and the great need for more housing have led to massive growth, with house prices rising by more than 10% year on year. The UK Government’s continued focus on regeneration of certain cities and the overall residential undersupply has led the market to become more competitive with developers concentrating on quality over quantity which led to increased rental prices.

Regeneration is still in its early days and up-and-coming city-center neighborhoods have become lucrative off-plan investment opportunities. Prime investment cities include Manchester, Birmingham, and Liverpool that offer affordable entry-level prices and high yields. A major advantage of investing off-plan is securing the purchase at a discounted price ahead of capital appreciation over the build period, giving the investors instant equity in the property at the point of completion.

While buying off-plan for buy-to-let purposes remains a reliable investment choice, student accommodation has quickly gained a reputation as the property bubble that just won’t burst. It is seen as ‘Brexit-proof’ as student numbers are guaranteed to rise year on year for at least the next decade with 3% growth predicted annually as demand increases. Read more about investing in student accommodation here.

Factors to Consider When Investing in International Property

1. Property Location

It’s important to consider the mid-to-long term view regarding the area in which the property is located and proximity to amenities, green space, the closeness to markets and transport hubs

2. Investment Purpose

Are you buying for self-use or buy-to-let? This decision will be informed by your investment strategy and what you are hoping to achieve

3. Expected Cash Flows and Profit Opportunities

Careful projections need to be done to ensure positive cash flow which is key to a good rate of return on an investment property.

4. New Construction vs. Existing Property

New construction (or buying off-plan) usually offers discounted pricing, the option to customize, and modern amenities. Existing properties offer faster access but might need costly improvements and upgrades.

Apart from the abovementioned factors, there are various other crucial considerations and pitfalls to avoid before deciding on a particular property investment opportunity. While property investment is mostly about financial returns, some investors are more concerned with a second passport, permanent residence, citizenship in an EU country or just wanting to experience the lifestyle that some European countries have to offer. Some of the best countries for these types of investments would be Spain, Portugal, and Italy. While international buyers have made roughly 20% of all of the property transactions in Spain, Portugal enjoyed a 10% property growth in the first quarter up to March. In addition to the aforementioned both Spain and Portugal also offer the opportunity to invest in their Golden Visa Programs which unlocks numerous other benefits for South Africans.

The Right Partner to Assist with Your International Property Investment Journey

Getting the help of an independent property consultancy is crucial to navigating complex foreign property laws, processes, and language barriers. At Safcom Investments we offer an end-to-end Property Investment Service that is focused on serving international clients with exciting investment opportunities.

DOWNLOAD GUIDE: INVESTING IN INTERNATIONAL PROPERTY WITH SAFCOM INVESTMENTS

With in-depth knowledge of investment property, Safcom Investments can provide investors with specific property data analysis and recommendations to make informed decisions about which particular investment type and property are right for you based on the purpose of why you want to invest in offshore property. With our unparalleled specialist knowledge of the international property market and an extensive network of professional contacts, we are uniquely equipped to help investors reach their capital growth objectives.

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If you need help in determining which investment type and country best suits your investment purpose, please book a complimentary telephonic consultation with us and we will gladly assist in analysing and selecting the best investment type and country that fits your need.