In fact, according to the latest research from ABTA, Brits will be spending more on their holidays in 2015 and it seems the weather will play a contributing factor in people’s decision-making. The fact that more holidaymakers are jetting off for some sun suggests investors should take more notice.
While shares and bonds continue to offer an impressive return on investment, 2015 will be marked as the year to invest in a property abroad. After all, holiday destinations expecting higher levels of occupancy spell a demand for more properties. And it is clear that commercial property is the way forward. The same research from ABTA revealed that package holidays have increased year on year, and Cape Verde is just one country that has witnessed this rise.
Last year, Thomson started selling all-inclusive packages to the new Melia Dunas Beach in Sal for avid sun seekers. It follows the success of its sales at Melia Tortuga Beach on the same island which, since launching in May 2011, has hosted over half a million visitors from the UK.
While a second home in a warmer climate is one reason to tempt investors abroad, the largest reason is (evidently) money.
Every smart investor will be thinking about the long term and it will be up-and-coming destinations that will offer a great return on investment. There’s no doubt you will find numerous bargains in established markets like Spain, but research shows that consumers are looking to travel to new countries. And data from the World Travel & Tourism Council (WTTC) recently showed the countries that could emerge as holiday hotspots.
With a good management or estate agency, people investing in an overseas property can enjoy healthy financial returns over a long-term. This is especially true in countries where there is political stability, consistent growth in land values and a sustained level of government investment.
The buy-to-let model is a popular route because it is accessible to the new and experienced. Investors can take advantage of various payment options – they can pay for a property using cash or buy through their pension. Properties can be purchased outright (with deposits starting as low as 45% on a new property) and fractional investments are available for those with fewer funds to release.
Whichever route an investor chooses to follow, high rental yields is the most important factor behind a decision to purchase an overseas property. The good news is that most expectations are exceeded. According to a recent survey by Rightmove Overseas, more than 60% of property investors buying overseas said they had received a higher return on investment than they had expected.
Even off-plan properties can bring instant returns and, importantly, a high level of security. As an example, The Resort Group guarantees an off-plan incentive of as much as 7% per annum return during the construction phase.
Buying into a hotel management scheme also offers benefits. The beauty of investing in a property associated with a well-known hotel operator is that the resort will be marketed on a global scale through travel companies, agents and tour operators. Once a holiday resort is completed and operational, investors can expect ongoing rental income and consistent capital growth.
And of course you can expand your property portfolio as much as or as little as you like. If you’re consistently getting a higher return and further down the line you are hungry for more, you can release equity from your existing property to pay towards your next one. After all, our country will always be on the colder side and Brits will always want to jet off to greener grass.
