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Profitable Foreign Property Investment - Overview

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Foreign Property Investment

Thinking of investing in property investment outside the UK?  This section provides a summary of my views on what type of foreign property investment is likely to be most profitable in the medium-long term. The information is meant to provide pointers to investors and give insights into trends that may affect capital value increases in the future. 

Trends – exploiting the “baby-boomers retiring” market

Global demographics dictate that the largest market in the next twenty years will be for the baby-boomers who will be retiring. In the UK/Europe and USA these citizens are 42 to 58 years old now. The bulk of the wealth is in the middle classes, in the middle ages requiring middle market homes for retirement. These are not “retirement homes” per se, rather homes that are suitable for active 58 to say 75 year olds. They are likely to be in the hotter, drier and sunnier areas of a country, at the coast, near picturesque towns or in the centre of cities.

The bulk of a country's retiring population is likely to stay in their base country with general migration south to sunnier climates, and/or to coastal areas. Very few retirees will leave their region because of the necessity to be close to family and friends, not least in case they get ill, but more immediately because they will want to spend much of their spare time socialising with family and friends.

Most of the retirees and their wealth will stay in their base country. This model suggests they will migrate to towns, villages, sea-side resorts and cities. Contrary to popular perception, they will not want to be living “out in the sticks” in remote mountainous or rural areas, particularly as they get even older. A typical property which will be in demand will be a two double bedroomed, two bathroomed apartment looking out over a golf course, beach, harbour, marina or sea-front on the south coast of a country. Communications will be important such as proximity to airports, roads and rail. Amenities will also be very important such as the quality of health care, proximity to hospitals, doctors, supermarkets, arts and theatre, cafes and restaurants.

So if you are looking for capital value increases in future, it might be best to try and capture part of this market, or at least expose yourself to part of it.

Before choosing some specific countries in Europe to analyse, I will first “skate” around the regions of the world to give my view on worldwide baby-boomer market opportunities. Please note that I am not advocating investing in any particular country or region – it is up to the individual to decide based on thorough research and analysis – however, I hope the insights below provide you with some pointers and get your mind to think of the possibilities.

See also the following PropertyInvesting.net Special Reports:

You can use the table below to make your own assessment of the potential of a particular country or region - see my assessment of Costa Del Sol, Spain.

Criteria for assessment of foreign property investment:
Criterion
Score (out of 10)
Restricted supply  
Demographic migration  
Amenities  
Price of property (current perceived value)  
Communications  
Coastal – sun/sand/sea  
Warm weather  
Dry weather  
Proximity to large population centre  
Stability of country (social, political)  
Currency risk  
GDP growth of country  
Rental demand  
Rental yield  
Total


out of a possible 140

(scores from 0 = very poor to 10 = excellent)

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