If Santa were a savvy property investor what might he do?

Father Christmas would do well to think about this with a clear head and before drinking any sherry. Why?

Because he would need to have clarity of purpose

Savvy Santa Claus Investor

He would need to give careful consideration to where in the world he might invest. If in the UK he might think about maximising his income from an investment and might consider putting his money into higher yielding HMOs (Houses of Multiple Occupation) or Serviced Accommodation. But, with that comes higher levels of involvement on his part. Given his sporadic appearances across the country, at odd times of day, he might not have the commitment or consistent levels of time and effort needed to manage these more labour-intensive types of property investments. Of course, he could find a managing agent to act on his behalf, but he would still need a certain level of ‘presence’ to keep on top of them and make sure they are representing his interests properly.

Something like a Managed Leaseback home might suit his ambitions and lifestyle well. It offers a bit of income from when it is let out, but he could still make personal use of it for when he is off-duty. Even better if it is somewhere hot like the South of France, or in a ski resort so he could take a break immediately after Christmas. Mind you he might be a bit fed up with snow by that stage, who knows?

Reality of investment timeframe

Father Christmas would also need to be realistic about how much time it will take to buy a property, particularly if he needs to apply for a mortgage. The buying process is likely to take longer, especially if dealing with a local foreign bank for a mortgage. He really doesn’t want to be forking out for expenses upfront, if he is not fully geared-up to buy.

He also needs a reality-check on what time he can dedicate to building a property portfolio alongside his busy job and tight schedule. If he wants to forge ahead nevertheless, he might need some help and support in finding and buying the right properties for him and his ambitions.

Value: a property with innate value or just simply cheap?

Some investors think they have got a great deal if they have bought cheaply. But this isn’t always the case. For example if it does not have the correct planning or build permits or licences, its value can be severely diminished or unsaleable or illegal. Or if the property is in a poor location with a scarcity of amenities, or transportation links, then it might not represent great value. Father Christmas will want to have some ‘value’ when he comes to sell, or pass it, on.

Exit: does Santa have an end game plan?

It always helps to know what might be the situation in 5, or 20 years’ time. For Father Christmas – who is getting on a bit now – he might need to consider how he passes his property on in a tax-efficient manner. Inheritance rules differ quite a bit from the UK to Continental countries like Spain or France, where descendants tend to have more rights to parental assets than is automatically the case in the UK.

I work with time-strapped entrepreneurs – like Father Christmas – and expats who don’t have the time, local presence or have gaps in their know-how to build property portfolios in the right way for them. This means you can carry on your day-to-day lives without spending disproportionate time getting sucked into investing.

If you would like to discuss your situation or find out more then please get in contact.
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Property Venture® is an award-winning, European investment property specialist and sits on the Advisory Board of the Association of International Property Professionals (AIPP) the business has been vetted, approved and voluntarily commits to Industry Regulation and the Professional Code of Conduct. We are known for our quality customer service and non-pressurised approach to sales. Take a look at what our clients say

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What results when politicians tamper with property markets?

I was prompted to write this when I read about the St Ives’ property market, in Cornwall, UK.

The town attracts holiday makers, visitors and habitants, given it is an idyllic seaside town.

United Kingdom_Coastal Properties_Boat-Sea-scene

The problem for the locals, is that it has attracted nationwide interest in its property market and the blame is laid on this wave of home buyers for pushing up the property prices, to the extent that they can’t get on the housing ladder.

So the Local Councillors thought the way forward was to restrict new build home sales to local residents and not to buyers intent on using them for second homes. It was also deemed to be in the interests of the local micro-economy to try to reduce the overreliance of it on tourism.

You can see the logic.

But three years’ on, the average property price has grown 3 per cent year on year from the £323,000 in 2016 when the local referendum took place about introducing this policy. That is c. 14 X the median earnings in Cornwall. So the policy may have abated the price growth – although many micro property markets have experienced subdued price growth across the UK during this period – but buyers have turned their attention to investing in second hand homes. It’s a bit like blocking off one part of a stream, only for it to find a different route, or way round the obstruction.

The seaside town’s rule that new homes are kept for primary residences has been criticised for hampering supply. New builds account for 5% of house sales and the ruling has deterred developers from building new homes.

How to tackle property demand and supply issues?

There are initiatives in run down areas and uninhabitable spots, of selling houses for a nominal sum of say £1 a house, on condition a minimum amount is spent on renovation and making it liveable.

Then there’s help to get a foot on the property ladder through Housing Association shared ownership, Help to Buy and there are tax disincentives to buying second properties in the form of a stamp duty surcharge.

But these are not necessarily all that relevant to St Ives (apart from the tax), given it is an idyllic seaside town, hardly run down, but less frequented in Winter and with limited career prospects beyond tourism. And this new-build policy does not necessarily address short-term lettings, which must irk many locals too.

One view is that it is a tourist business and so the town should be run more along business lines. Which partly means welcoming investment and the spending power of tourists during the Summer months and managing the trough season better. In today’s world of remote working perhaps investment in infrastructure, including broadband and other incentives for businesses would be a more worthwhile effort to create a better year-round future so that it isn’t always bigger cities that attract workers and year-round home owning.

Inspired by an FT article September 2019

If you would like to discuss your situation or find out about suburban and city investment opportunities then please get in contact.

We work with time-strapped Ex pats and Entrepreneurs who don’t have the time, local presence or have gaps in their know-how to build property portfolios in the right way for them. In essence, to buy better in less time.

Our clients get regular updates on hot deals and the latest changes in the property market. Want these? Go here

Property Venture® is an award-winning, European investment property specialist and sits on the Advisory Board of the Association of International Property Professionals (AIPP) the business has been vetted, approved and voluntarily commits to Industry Regulation and the Professional Code of Conduct. We are known for our quality customer service and non-pressurised approach to sales. Take a look at what our clients say

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