Investing wisely in the present climate
Well it seems that if you want to get onto the property ladder you are just going to have to raise an even bigger deposit then ever. It was reported today that to get a decent rate of interest the lenders are looking for a 25% deposit, the knock effect of this is that lending is at it’s lowest for years, house prices are falling at record levels, so even if you can save or raise the 25% by the time you move in your equity will have reduced on your new property.
What’s the answer well more and more people are looking overseas to invest, at least 47% of first time buyers are looking at the overseas housing market as a serious alternative to investing their money. Prices in the overseas markets are far more affordable than in the UK and if you look around and invest wisely you will probably see returns on your investment of between 10-50% in some markets even more than this. Places like Brazil are anticipating growth of over 50% year on year, Tunisia which is very new to the property investment market here you can expect 20-40% growth with even bigger returns when the market takes off there. Italy and Egypt you can expect to see on average 25-30% growth on your investment, you are not going to get returns like these in the UK for many years to come I thinks if ever.
So what’s the best way to go about raising your deposit so that you can buy in the UK market again whether buying a home or investment, and in my opinion both factors should be taken into account even if it is to be your home? Well why not look at the overseas markets, if you look to buy an off plan property you will in most instances only be required to put between 20-50% down as a deposit then the final amount on completion which is usually 2-3 years away, and with prices starting at an average of £20-30,000 you don’t need to find much to make a purchase. In some instances you will be able to buy a place outright for less than the deposit needed in the UK.
You then sit back and your next decision comes when your property is nearing completion, do I sell or do I rent? This will obviously depend on where you have bought and the market at that time but what ever you choose to do, flip or rent you will still see a substantial return on your investment. If you sell you may now have gained the necessary amount for a deposit back in the UK as the market will probably have settled down and be starting to recover in two to three years.
And as a final note, remember your money can’t work for you if you don’t invest it.
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