Is it time to consider a Contrarian Investment Strategy?

  1. Yes

    4 vote(s)
  2. No

    1 vote(s)
  3. Not Sure

    0 vote(s)
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Is it time to consider a contrarian investment strategy?

Discussion in 'Buying Overseas Property' started by Nicholas Wallwork, Jan 9, 2009.

  1. Nicholas Wallwork

    Nicholas Wallwork Editor-in-Chief Staff Member Premium Member

    As property markets around the world continue to falter is it time to consider a "Contrarian Investment Approach"?

    Definition of a "Contrarian Investment Approach" :-

    "In finance, a contrarian is one who attempts to profit by investing in a manner that differs from the conventional wisdom, when the consensus opinion appears to be wrong.

    A contrarian believes that certain crowd behaviour among investors can lead to exploitable mispricings in property markets. For example, widespread pessimism about a property/property market can drive a price so low that it overstates a property market's risks, and understates its prospects."

    Please vote in the poll and post your comments and opinions.
  2. revealrealestate

    revealrealestate New Member

    In times of crisis often come opportunities for creativity and reinvention. We're beginning to see people step out of a holding pattern of "waiting until things get better". So for example people who will have retirement cheques that are much smaller than they anticipated are looking for countries that offer a more affordable cost of living and cheaper health-care - and taking action.
  3. lena green

    lena green New Member

    Yes its time to change tactics and select retirement areas where its cheap to live as suggested. But, get a group together rather than going it alone as the clout of ten investor/buyers is mightier than just one. It does`nt take much to organise your own building team either and take overall control of the build rather than sitting waiting at home. You`ll be surprised how inexpensive it is to build a decent property when there`s no profits to think about. Builders and developers don`t work for nothing, so cut them out.DIY it.
  4. revealrealestate

    revealrealestate New Member

    The idea of grouping together for leverage is a great suggestion. One way to focus this DIY build strategy is to negotiate a parcel within a real estate development. This means you will benefit from the public amenities that the developer is providing (particularly relevant in emerging markets) Given global slowdown there are more developers open to carving out a parcel within their projects to a group who will do a DIY build.
  5. lena green

    lena green New Member

    .............and the next step is to ask the land owner to 'gift' the land to the group. The group of say ten investors will then build 12 homes on it. 2 for the landowner which when sold will more than cover the costs of paying up front cash.
  6. revealrealestate

    revealrealestate New Member

    .... yes - 'free' land deals are definitely possible to groups wanting to build. A key motivation for many developers right now is simply to get building started on their developments. This breathes life into the project and will greatly assist them in selling their own inventory.
  7. lena green

    lena green New Member

    It works like this....
    The word “Permuta” comes from Latin “permutare”, per+mutare = change, alter. In English, it means permutation, to change the sequence of, or to change the order or arrangement (permute). In Portuguese, it also means exchange of one object for another.

    You will not be familiar with the word 'Permuta' unless you are fluent in the Portuguese language. In simple terms, its a joint venture where the land owner 'gives' his land to the partner, the partner builds and 'gives back' finished property to a previous agreement. Usually around one third or less of land value after planning. The beauty of the system is that there are no upfront land purchase costs.

    Over the last few months there has been a distinct rise in Permuta`s offered privately but none can be found in the real estate agents windows.The reason being, commissions are not welcomed along with publicity. Tax is avoidable by the recipient when he accepts property rather than cash as payment.

    'Free land' is unknown anywhere in the world but here in Portugal it is a regular 'under the table' event.

    For the small or large developer, especially foreign builders looking to get into the lucrative Portuguese building market, its a very easy and inexpensive way to do it.

    If you are a developer or investor, this is for you. If you are an agent, commissions are excellent for locating a developer/builder or investor.
    Initial costs are very low with fees only required for entry, company set up architects and lawyers. From there on planning permissions are required and then building commences.
  8. Osama Fathy

    Osama Fathy New Member

    Investment opportunity

    Nowadays, the world lives under the Global Financial Crisis, and the results thereof still going on, and this is the time, in which, all the investors shall change from their tactics and select the areas that still away of the crisis and it is not anticipated to be affected by said crises, as already took place at the countries that are the core of the crises like U.S.A, Europe etc.

    Therefore, I’m hereby advice to re-directorate the investments to the areas which are beyond of said crisis and still have potential investment opportunities, in particular, the touristic fields in general, and the Real-estate Investments and etc.

    As we are in Egypt, have international resorts like Sharm El Shiekh, Hurghada, Safaga, and other places, I advise to check these areas as a potential investment opportunity in the touristic fields and other fields.
    Last edited: Jan 28, 2009
  9. lena green

    lena green New Member

    Morning Osama, words of wisdom as Egypt and Morroco are top of the pops at the moment but where are the buyers? The Brits are hanging on to their cash or buying up repos in the USA for peanuts. Holidays in the UK are booming, 6 million already sold most in the UK, they are staying home this year. What will attract investors is low property prices, we may all have to forget about high profit for a while and take a big drop in lifestyle................better than going bust and hurting lots of people.Lets not be greedy as the sooner we get prices down, the sooner we trade out of the recession.
  10. Aninnyhet

    Aninnyhet New Member


    Your are Great. And so is your site! Awesome content. Good job guys! Interesting article, adding it to my favourites!
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