A recent survey of 4,000 people showed 47% of the 18-29 age group plans to buy overseas, with 64% of those being first-time buyers. 81% of this new generation intend to let out their overseas property when they are not there. In all, 40% of all Britons plan to buy abroad. Why?
The countries where Jet-to-Let is an attractive option are growing all the time, along with the choice of property and the demand for it. At the top of many people’s list is a coastal villa in the top destination for UK tourists, Spain. The sun, sea, sand and sangria lifestyle is certainly alluring to a lot of people, and the option to ‘live and let’ - use the property for some of the year yourself and let it out for the rest - makes purchasing a Spanish property seem a sound investment. As Spain is a popular tourist destination with British and Europeans alike, investing here is unlikely to lose you money in the long term, but it might not make you as much as somewhere further afield.
For example, Cyprus is known as the jewel of the Mediterranean for good reason as this beautiful island offers sunshine almost every day and continues to become a more popular holiday destination. Property is significantly less expensive than in Spain but with the island’s accession to the EU, a rapidly improving economy is likely to send prices rising fast with some analysts predicting growth of up to 40% before adoption of the Euro in January 2008. Investors would do well to buy now and reap the rewards in the coming years.
Low-cost airlines such as Ryanair and EasyJet have opened up much of Europe and the effect that this has had on tourism and the Jet-to-Let market cannot be overstated. The Italian countryside, French cities, the Algarve, and even Morocco are all now accessible from UK airports, along with everything in between.
Many Eastern European countries are also enjoying a boom in their tourist markets and whilst Croatia has experienced this already, places such as the Czech Republic offer an opportunity to let to the local population like the traditional UK Buy-to-Let model as well as the increasing number of visitors.
More uncertain than this are countries such as Bulgaria, which are tipped as ‘the next Spain’. Whilst the appeal of the same sort of holiday experience on the Black Sea coast for half the price is undeniable, the lack of year-round sunshine - five months at best in Bulgaria - and longer flight time make the prospects less promising after careful consideration. It is also worth noting that no budget airlines currently fly to the country and the re-sale and private lettings market is untested.
The main pitfalls that await those investing in overseas property include the legal considerations that must be taken into account, as the systems in place in other countries can vary considerably from that in the UK. A qualified English-speaking lawyer is often the answer to overcoming these sorts of problems and independent advice is always important.
In addition to this, there is also your ‘exit strategy’, which is effectively what you do with the property to realise your profit, but also covers how you get out of a market if things change for the worse, your very own ‘plan B’.
Dominic Farrell is the founder of Bewarethesharks.com and is the author of the bestselling property investment book, 'The Jet-to-Let Bible: The secrets of overseas property investment' published by Lawpack Publishing Ltd.
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Read Dominic Farrell's best-selling book on the secrets of buying abroad