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Revealed: Top international property investment hotspots

23 Jul 2019

The key to a successful investment property is to buy in a ‘property hotspot’, but how does one identify a hotspot in areas you don’t know well?

Porto in Portugal has undergone massive transformation and now offers great property investment opportunities.

Lisa Bathurst, experienced international property specialist and founder of Hurst & Wills, shares some tips to look out for.

When you’re buying a property for your family to live or holiday in, you only need to consider your needs. Basically, find a place that works for you, and buy there. However, when buying property abroad as an investment, there are some pointers you should look out for to ensure you’re buying a good investment, says Bathurst.

She says a good tip is to look at previously undesirable areas that have shown price increases for the last three years. This is a good indication that the area is up-and-coming, and it’s likely you’ll get better value for money buying there.

Porto in Portugal was rundown and almost uninhabitable due to the government’s archaic rental laws. Since the law changed in 2012, the city has seen a transformation and now offers some great investment opportunities.

Also, do some research into what is happening with the population in the area you’re interested in. Find out if the area is growing, and the average age of people buying and renting homes there.

Lisbon is attracting lots of young professionals involved in tech startups, and has government initiatives to attract business to the city.

Places that have a high population of younger people in their 20s and 30s will inevitably experience house price growth in a relatively short space of time.

The majority of these people will be young professionals who will require proximity to local retailers and transport links, which will encourage more local business owners to the area. Lisbon is a great example - the area is attracting lots of young professionals involved in tech startups, and has government initiatives to attract business to the city.

It’s also a good idea to check whether there are plans for future infrastructure and transport.

Obviously better infrastructure means higher house prices. Larger-scale infrastructure or transport projects are often indicators of initiatives that will bring employment to the area. That inevitably leads to more families moving to the area, and this pushes up the demand for houses.

The high-speed train, HS2, currently under construction in the UK will cut the travel time from Manchester to London to just one hour, essentially making Manchester a commuter city for London. This is bound to drive up property prices.

The high-speed train, HS2, currently under construction in the UK will cut the travel time from Manchester to London to just one hour, essentially making Manchester a commuter city for London.

As always, old-school economics still applies. Look at the demand-and-supply ratio in the area. How many homes are needed to meet the current demand? Is the demand likely to increase? If so, what initiatives are in place to satisfy that? Often governments set targets nationally and regionally to cope with housing shortages, and developers may be given incentives to invest in certain areas.

Manchester needs 55 000 new homes by 2027, but only 3 000 a year are being built, another reason that this city is a prime investment opportunity.

Make sure the area is a convenient place to live in. Places that have a supermarket, a school, access to a major motorway or train line and local shops within a 5-mile radius are more likely to become future hubs for homeowners.

Also take note of the number of estate agencies in the surrounding locations. Agents have specialised tools and strategies for identifying where to have new branches. So, if there are many new agencies springing up, it is likely that this is an area to consider. This has been the case in the Algarve, with new agencies opening branches and adding areas outside of the main cities to their portfolio.

Lastly, Bathurst says restaurants and independent coffee shops are a tell-tale sign that an area is on the up. The emergence of independent retailers suggests demand in the area from people with a higher level of disposable income, and this is always a good sign. The suburbs of Birmingham are now bustling with retailers popping up in the neighbourhoods close to the city centre.

“The best advice is always to consult with property specialists when buying investment property in areas you don’t know well. Independent specialists who are not tied to one developer are the best option as they only work for the client,” says Bathurst.

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