With the current worldwide property boom along with every shrewd investor coveting to partake in the lucrative business of investing in buy-to-let properties, the most central questions should revolve around the location and the type of property that would provide the most rental yield and capital appreciation.
In the thread, most members have determined that Berlin has a market that is ripe for rental investments. One of the supporting reasons members have given would be the existence of a strong rental culture in Germany. Economic factors such as the country’s low rate of home ownership, the expensive property prices, and the limited access to mortgage products have given rise to this rental culture.
Panama places second when it comes to the number of members sighting this country as the most excellent location for rental investments. The country’s current low vacancy rate is brought about by the country’s thriving tourism industry where in the influx of tourists paved the way for the profitability of the country’s five-star hotels. Thus, these hotels are even fully booked most of the time. Aside from this, the current trend in the Panamanian rental market is the lease of fully-furnished apartments to tourists.
On the other hand, in terms of determining the best buy-to-let properties, most members have mentioned developments that were designed as resorts or properties that were within locations with a strong tourism industry. Some members even cited Morocco, the Canary Islands, and the Cape Verde Islands. However, a few members claimed that rental investments are best made with long-term rental markets and not the seasonal or short-term markets that are usually being featured by these tourist hotspots.
What is most central, however, is the fact that research and proper information about a desired property is essential before you even attempt to invest in these properties. A well-explored market can surely produce lucrative profits for such investments.
Whilst many property markets all over Europe are experiencing a halt and a leveling-off in their house price growth, investors have turned towards the eastern region of the continent – searching not only for emerging markets but for properties that are being sold at a relatively inexpensive price.
Of all the markets in Eastern Europe, Germany is the top choice of most analysts. In fact, it is deemed as an ideal location for property investment. This is due to its cheap house rates, which are in absolute terms and high rental yields. This goes even with the combination of the political stability and recovering economy of the country. At present, properties in Germany’s major cities can yield about 8% up to 10% at a time.
Germany is one of the few economically advanced countries in the world that has not experienced a house pricing boom in the last decade. The popularity of the country’s property market in the 1990’s, a period of sluggish economic growth in 2001, and the bursting of the Dot Com stock market bubble in the same year recorded unemployment rates. Moreover, the sudden bankruptcies of many citizens due to the housing market crash add up to all the factors that contributed to the stagnation of housing prices in the last ten years.
While market analysts predict an increase in housing prices in the future, a property market boom in Germany may not happen. This is due to the local markets’ performance, which currently does not show a leveled output. The market, however, shows much opportunity for investments in the rental market. Germany’s very low home ownership rate of 43% is likely to increase in the future. Rents are likely to rise as published housing companies, which have kept rental rates artificially low, are being forced by the government to sell their properties. In time, an impending shortage in housing developments will pose a major dilemma and, in turn, will subsequently raise the rental rates. Thus, it is the property boom that is being projected as an unlikely event until the next five years.