Article: Off-plan Real Estate Investments

Investing in property before it is built is undoubtedly an effective way to increase your profits in the real estate market. By investing at the development stage you are benefiting from below market prices, where developers are keen to offer early purchasers substantial discounts against market value to help finance the project and the investor is able to buy a 2009 property at 2007 prices. As you are reliant on the paper value of the property increasing over the period of construction, it is vitally important to seek out locations where the property markets are set to become hotspots in the future to maximise your potential returns.

There are 3 main elements to consider when seeking out your investment:

1. Price: the development must be at a highly competitive market price

2. Profit: does the market have growth potential to maximise profits?

3. Performance: Investments are dictated by performance returns and as such it is important to establish your time frame, when will you look to release your investment?

In any investment you must have an exit strategy in place, to maximise the resale potential of your property you need to do your due diligence and thoroughly research: location, true comparative prices of units in the nearby area, finish and property specification and importantly market analysis. Are you investing in a growth market? Is there demand for real estate in the area?

There are two main exit strategies to consider, firstly, there is ‘flipping’ the property, a popular low cash flow technique for multiple investments. Secondly, investors have the option to buy-to-let. This requires greater liquidity to exercise, however is made more accessible with guaranteed rental schemes and apart-hotel investments.

Off-plan investing is no longer merely on the real estate investor’s radar; all types of investors united in their desire to create wealth are turning to the strategy. Indeed, according to a recent poll conducted by NBC News/Wall Street Journal, 80% of Americans deemed real estate a safer investment than stocks – an opinion backed up by historic precedence. As illustrated in a recent CSFB report, equities between 1920 and 2000 generated an average yield only 20% above that of property, whilst incurring a risk ratio between 3 to 5 times that of property investment.

There is a discernable trend towards purchasing property purely for investment, with much of this money moving to the emerging markets. Investors are realising the advantages of real estate investment and the increased financial power it can bring. For example, a few thousand Euros invested in a leverage-based off-plan investment in Turkey or Bulgaria essentially gives control of a tangible asset worth much more than the initial capital outlay. Investors in stocks do not have that luxury and whilst leveraging is prevalent within the Forex and Commodities markets, the risk exposure associated with these investment types for small-scale investors is such that it does not represent a low-risk investment vehicle.

John Limbrick of Obelisk International, reiterating previous comment, says: "Real estate is considered a safer asset than stocks. For a start, property and land aren't generally traded as quickly and easily as stocks and aren't liquid assets. Real estate investors tend to behave more calmly than their counterparts on the stock market, so the real estate arena is less subject to the effects of panic selling than stocks and shares."

Just like any investment strategy, investing in real estate needs to be carefully managed throughout the process: from research and selection, to purchasing and resale. Specialist companies such as Obelisk International offer a wide range of real estate investment opportunities in sought after locations as well as more dynamic, emerging markets. Obelisk International focuses purely on real estate for profit – an attitude that dictates selection and due diligence over glossy marketing and panoramic pictures. Investor education and information is high on the company’s criteria – an illustration of Obelisk’s belief in allowing its investors to choose only those opportunities that present tangibility, security and profitability.

For more information please contact Obelisk International on:

Tel: (0044) 808 160 0670Fax: (0044) 808 160 0671
email: info@obeliskinternational.com
www.obeliskinternational.com

South Africa’s Healthy Tourism and Economy Bode Well for Property Market

South Africa’s turbulent political history does nothing to hamper investor interest in the potential of its real estate.

Apartheid may be fresh in people’s memory and many black South Africans may still suffer from poverty, but there is fresh optimism about the country’s future. The country’s economy saw a five per cent growth last year and experts believe the growth is a sustainable one. While there is still much ground to make up, both economically and socially, there are real signs that South Africa is a nation in healthy recovery.

Residential land prices in the country rose by 14.4% last year while properties in areas of Cape Town started to see impressive price increases. The central business district of the city is experiencing great rejuvenation with safety high on the agenda and good housing becoming more available. Around 3,000 new inner-city apartments have come on the market in the last six months. Some experts are predicting that properties in the business district will experience huge price hikes and believe that the city’s gentrification is largely the cause.

South Africa already draws nearly 7.5 million foreign tourists a year thanks to its opposite seasons to the Northern Hemisphere and the minimal time difference. The country’s hosting of the Football World Cup in 2010 will only serve to add to its attraction to tourists, as well as investors.

Source

Budget Airline Routes Linked to Rising Property Prices

The countries - and areas within those countries - served by low-cost airlines are a key indicator of a booming real estate market.

It is a well-known fact that the investor who targets an area before the rest of the herd stands to make the most profits. However, this is not an exact science and reports abound of the latest ‘hotspots’.

However, experts advise that one way of predicting the next boom area for real estate is noting the new routes flown by the budget air carriers. These companies are quick to respond to new passenger demand and extend their services, however they in turn create demand for property by opening up accessibility to new areas. When airlines such as easyJet and Ryanair extended their services to countries in Eastern Europe, it was an early indication that there was to be a boom in that region.

Recent research by Savills (published in an article by ‘The Independent’) showed that prices of property within 10 miles of an airport used by budget airlines are nearly 40% higher than those near to airports serviced by scheduled flights only. Investors may want to watch Morocco, where 20 new routes are due to go in over the next five years.

Portugal’s Atlantic Coast is Making Waves in the Global Real Estate Market

At half the price of the Algarve and with all the beauty, the real estate of Portugal’s ‘silver’ coast is booming.

The Algarve coast of Portugal has been attracting tourists in their droves for years; those wanting more of the ‘real’ Portugal have recently been purchasing property on the Atlantic silver coast. While they want to profit from investing in the strip that runs from the north of Lisbon to Nazare at the early stages, before the big developers come in, they are conflicted. By doing so, they may alert more people to the relatively undiscovered beauty and therefore potential of this corner of Portugal. However, as a recent report in The Telegraph attests, the word is already out.

The silver coast is already on the radar of local Portuguese holidaymakers who flock to the beautiful beaches in the peak season of July and August, however out of season the region still remains quiet. The local nickname of this area is the ‘cold coast’ because of the cooler water temperatures and brisk Atlantic breeze. While the coast is not as hot as the Algarve, it has a temperate climate that is favoured by both surfers and families.

Investors will be keen to see if real estate on this coast will be as popular as that on the established Algarve. Seafront developments have just started to appear along the coastline, however it remains largely unspoiled. The area already has a number of golf courses in addition to the good beaches, both indicators of good rental yield opportunity. Prices at silver coast golf developments are currently much lower than their Algarve counterparts, although most lack their extensive facilities. Time will tell, but it seems that this region may not stay underdeveloped for long.

Istria, Croatia: the Feel of Tuscany at a Fraction of the Price

Affordable prices and a foreigner-friendly attitude are attracting investors and holiday-home buyers alike to Istria in Northern Croatia.

After years of the southern coast of Croatia seeing the most interest from foreign property purchasers, the last five years has seen the attention shift to the peninsula of Istria in the North. This is due to prices in the southern strip of the country growing while supply of holiday homes fell.

Holiday home purchasers are finding not only an increase in the choice of affordable properties in Istria, but also a welcoming attitude to foreign purchasers. Reports are that the climate and scenery are attracting those used to holidaying in Tuscany. The region may be reminiscent of the Italian hotspot, but properties there can be purchased at significantly lower prices. Prices in Istria also compare well with other parts of Croatia: upper-end homes can be purchased for around €1,500 per sq. m., whereas in Dubrovnik it is very hard to find anything for less than €3,000 per sq. m.

Other factors adding to Istria’s popularity is its accessibility (it was the first area in Croatia to be served by budget airlines) and its relatively simple purchase process in comparison to some other parts of Croatia.

Most foreigners purchasing in Istria, and indeed anywhere in Croatia, are doing so with the expectation that the country will join the European Union in 2009, causing a dramatic uplift in property values. The market witnessed this in the Czech Republic in 2004, just as is happening in Bulgaria since its entry this year.

Source: http://www.iht.com/articles/2007/05/03/properties/recroatia.php

Obelisk International’s Latest Project, The Poynte, Located in Top Resort of Bulgaria’s Black Sea Coast

Albena has been named as the location of the new project from Obelisk International, consisting of 68 sea-view villas built to exacting standards.

Obelisk International adds to its highly successful portfolio of Bulgarian projects with The Poynte in Albena. This development of 3 bedroom and 2 bathroom detached villas was chosen due to its solid potential for impressive return on investment. Due to Obelisk International’s investor-first business style, The Poynte is available at 41% below market value, providing early investors with a great opportunity for profit at the initial stages.

The site of Obelisk International’s next project is located alongside other new developments which allows access to the extensive range of facilities on offer such as golf courses, restaurants, bars and health spas. The Poynte’s own onsite amenities include a communal pool and tennis courts and landscaped gardens throughout. The Poynte enjoys an enviable location, on the outskirts of Albena, one of the Black Sea Coast’s most thriving tourist resorts, only 15 minutes from the bustling city of Varna and a mere five minutes away from the beach. This all adds to the investor’s likelihood of substantial and regular rental yield.

Each 3 bedroom, 2 bathroom villa at The Poynte comes fully detached with a first floor balcony, a ground floor terrace, a private parking space as well as a private pool as standard. Space is maximised on all floors and all bedrooms have fully fitted cupboards. Every villa has the added benefit of sea views.

The initial resale price of a villa in The Poynte is estimated to be £120,895, which represents an initial profit of £35,254 , coupled with a consistent 20% per annum capital growth, The Poynte allows investors up to 140% net gain over a 3 year period.

The Poynte offers both the flip investor and the buy to hold investor excellent potential - the potential short-term gain of 242% (profit relative to investment of £21,975) suitable to flipping whilst the investor using a buy and hold strategy would stand to make a profit of £123,266, based on the same growth rate, giving a return on investment of 144%.

Impressive potential returns such as these make it a natural choice for an Obelisk International project. Obelisk’s Santiago Sánchez-Lozano explains: “The Poynte represents pure profit potential, no matter what strategy the investor takes. The project has added value in a number of areas. Firstly its proximity to both Albena and Varna - the attractions these resorts offer ensure a growing influx of tourists, vital to maximising rental returns. Also, the inherent profit of the properties due to the development’s high standards. This meant that The Poynte was a natural addition to our portfolio”.

For more information on global investment opportunities and to find out about Obelisk International's latest projects, contact Obelisk International 0808 160 0670 or email sales @ obeliskinternational.com

About Obelisk International

http://www.obeliskinternational.com/ [Obelsik International] is a real estate investment company providing global investment opportunities that offer security, tangibility and impressive financial performance. Their service to investors is based upon three main principles: price, profit and performance.

CONTACT

Press Contact: Santiago Sanchez-Lozano, Marketing Director, Obelisk International, +34 952 820 319 or santiago@obeliskinternational.com - http://www.obeliskinternational.com/

FOCUS ON: Property Leveraging

Just as a lever allows someone to expend the same force and achieve a greater result, so does the property investor who uses leveraging achieve a greater return on investment for the same cash.

A leverage-based off-plan investment provides control of a tangible asset worth much more than the initial capital outlay, not the case for investors of traditional investment vehicles. Whilst leveraging is prevalent within the currencies and commodities markets, the risk exposure associated with the usage of leveraging in these investment types for small-scale investors is such that it does not represent a low-risk investment vehicle.

When purchasing a property with cash that costs £100,000 and presuming a growth of only 20% (therefore generating £20,000 cash profit) the investor receives 20% profit and turns £100,000 into £120,000. However, when purchasing the same property using a leveraged approach only £20,000 cash as a deposit is required and also using a 80% ‘Loan To Value’ mortgage (presuming the same growth) the investor receives 100% profit and turns £20,000 into £40,000.

However, leveraging is not wholly dependent upon investors using mortgages to achieve leverage. Locating and purchasing property under market value (inherent profit) has the same leveraging effect without the need to arrange a mortgage facility, nor the need to make mortgage payments.

British Real Estate Investors “Naive” to Overlook Eastern European Market

Overseas property investors could be overlooking a key market by not investing in Eastern Europe, according to investment expert.

Investment strategist Carl Dear believes that British real estate investors are unwise to disregard the investment potential that property in Eastern Europe holds. He claims those shying away from this emerging market could be doing so because of a naïve view that most Eastern European countries have a “horse and cart” economy. According to Dear, countries such as Slovakia and Latvia are in fact so dynamic that they will begin to attract more and more real estate investors.

However, Carl Dear goes on to say that the British are starting to realise the potential of investing in some of the new European Union states, Bulgaria and Romania being two of the most recent EU additions as of January 1st 2007. Dear claims that “these countries are dynamic, they're educated, they're ambitious, they're clever, and they know that they have a strong competitive edge over a lot of lumbering companies over in the west."

It is not only Carl Dear’s opinion, but the opinion of many real estate experts that property prices in Eastern Europe that are appealingly low now will become in line with those in the rest of Europe before too long.

If you wish to see the origianl article please click here

Real Estate Billionaire Eyes Emerging Markets of Brazil, Egypt, Mexico and China

Billionaire Sam Zell, one of the world’s most famous and successful real estate investors, is focusing his investments on emerging countries such as Brazil.
The founder of Equity Group Investments LLC, Zell has earned the nickname “The Grave Dancer” due to his skills at profiting from distressed sales of undervalued real estate. Zell holds interests in a number of companies listed on the New York Stock Exchange, one of which, Equity Office Properties Trust, recently sold for a staggering $39 billion when it was sold it to The Blackstone Group.

One of the world’s most successful investors, Zell was recently quoted as saying, “This is an extraordinary period for real estate, a golden age”. He explained that the market was booming due to the amount of investment cash made available from REITs, pension plans and other sources, leading to “predictable profits”.

A recent question and answer session with the billionaire revealed that Zell is focusing all his current investment efforts into the emerging markets of Egypt, Brazil, China and Mexico, among others. Other investors are sure to follow suit, as he is known to have an uncanny ability to see around the corner and anticipate imminent changes in the market.

UK House Price Average Now Above £100,000

First quarter results for 2007 show it is no longer possible to purchase property in the UK for less than an average of £100,000, with all areas showing price rises.

The property market in the UK has seen price increases across the board for the first quarter of the year. New research shows that it is impossible to find an average house price lower than £100,000 in any town in the UK. The report by Halifax found the Scottish town of Lochgelly in Fife to have the lowest average price at £104,738. It was possible to find properties below the £100,000 average in as many as 200 towns across the United Kingdom as recently as 2002.

Halifax found that all areas of the UK recorded price increases from January to April of 2007; Scotland experienced the highest increases of 7.5 per cent, followed by the south-west with 5.4 per cent.

Experts at the Halifax believe that although house prices in the UK are still rising in a tight local real estate market, factors such as interest rate rises since the 2nd quarter of 2006 have lowered demand somewhat. Additional interest rate rises as well as council tax rises could result in the price growth slowing. Economists at Nationwide seem to concur, as they believe these increases would “cool” in the coming year.

If you wish to see the original article please click here

Real Estate Summit Highlights Istanbul’s Potential for Global Investors

Istanbul hosts a meeting of real estate executives with healthy foreign investment into the city’s property high on the agenda.

A real estate summit has been held in Istanbul, Turkey, organized by the Association of Real Estate Investment Companies. The summit, which took place at the Swissotel in Istanbul, focused on the capital city’s potential for foreign property investment. The discussions centered around the general opportunities brought about by recent impressive global capital into Turkey, as well as the specific plan to rebuild the Istanbul’s historical peninsula.

The Turkish Government has been lifting restricting regulations since 2000 and has found agreement with the state regarding common policy. This has helped the country become more attractive to global investors.

The Istanbul-focused summit looked at developing the city as an investor-friendly location in order to attract more foreign capital. Istanbul is naturally a focus of investment for Turkey as it is the location of 21% of the entire country’s business.
Real estate prices in the capital are still relatively low with the historical areas in need of regeneration being of particular interest to the investor. Around 1 million square metres of the ancient neighbourhood are to be restored to bring the area in line with the standards set out for a European Cultural Capital in 2010. Turkey’s Preservation Council will start to plan for this regeneration this year.

Obelisk International Add Luxurious Aparthotel to its Portfolio: Crystal Spa on Bulgaria’s Black Sea Riviera Coast.

Obelisk International’s latest offering to its clients is a luxury development of 354 apartments, managed and serviced as an aparthotel, located near the popular city of Varna.

Crystal Spa Aparthotel is set in lush countryside with sea and valley views and is located only 2 minutes from the beach. The site is in the heart of tourist country with all the natural attractions the Black Sea Coast has to offer, and the cosmopolitan city of Varna and its international airport can be reached in only 15 minutes.

The 5-star, fully furnished development of studio, one and two bedroom apartments differentiates itself from competitors with its vast range of on-site amenities. These include spa and sports facilities, 17 outdoor swimming pools, an indoor swimming pool, tennis courts, golf driving ranges and golf school, restaurant, art gallery, shop and full concierge service. Such facilities mean that Crystal Spa Aparthotel is a 12 month resort, adding value to the investor through the year-round rental yield potential. Indeed, the developers are so confident of this rental potential, that the investment opportunity comes with a guaranteed two year rental income of 6%.

Further benefits of the extensive facilities at Crystal Spa include the potential resale value. Kathya Ruh Dos Santos, Project Manager at Obelisk International, explains: “The luxury finishing and high standards of the Crystal Spa development not only set it apart from other resorts on the Black Sea Coast, but will significantly impact the resale value of apartments, a key reason Obelisk International was keen to be able to offer the project to its clients.”

For more information on global investment opportunities and to find out about Obelisk International's latest projects, contact Obelisk International 0808 160 0670 or email sales@obeliskinternational.com

About Obelisk International.

Obelisk International is a real estate investment company providing global investment opportunities that offer security, tangibility and impressive financial performance. Their service to investors is based upon three main principles: price, profit and performance.

CONTACT

Press Contact: Santiago Sanchez-Lozano, Marketing Director, Obelisk International, +34 952 820 319 or santiago@obeliskinternational.com - http://www.obeliskinternational.com/