The buyer of real estate abroad - the investor or the victim of another financial bubble?





30.10.2010 00:02
Like mushrooms after rain in Ukraine began to appear the agency for the sale of real estate in exotic countries. United Arab Emirates, Cyprus, Panama, Dominican Republic, Egypt, Bulgaria and Turkey - is not a complete list of countries where Ukrainians actively offer to purchase real estate.

The main argument in favor of the home buying "on the edge of the world" real estate brokers use the "beautiful nature, excellent climate and the rapid growth in property prices in these regions.

To convince potential buyers not only in prestige, the need, but also yield the acquisition of such real estate sellers use the entire arsenal of marketing tools. Realtors play on the emotions of buyers - go on about how nice to enjoy the ocean from the balcony of his house, admiring the sunset. Realtors use the vanity and greed of their clients, who proudly referred to as "investors" by comparing it with the Russian billionaire Abramovich. Mol, Abramovich has invested $ 30 million in the construction of the resort in Northern Cyprus. Hard not to succumb to the entreaties of when you hear such arguments. Want to buy property as soon as possible so cheap to sell it more expensive later. Incidentally, this is an ancient method of influence on the feelings of the person who successfully exploited fraudsters to get the victim to part with their savings.

Everyone knows the financial pyramid MMM, Elita-Center. Who has invested in pyramid schemes in the beginning, time to get huge dividends. It is important not to miss a moment. Who invest in any property, whether domestic or foreign, at the beginning of the boom that fueled the market, contributes to the inflow of capital and increase the value of the property. If you sell your property at peak prices, you can earn 100 - 500% of invested capital. "Bubble" in the property market grows from 3 to 20 years, then bursts. Professional investor, in contrast to conventional buyers and victims of the bubble, understands, when the bubble is still young and can invest in it, and when the market is overheated and the urgent need to sell nedvizhimost.Vmesto colorful local merchants are the nice, European-dressed salespeople .

Abramovich, no doubt, an investor. After all, he invested in real estate in Northern Cyprus at the beginning of construction boom in the region. He did not buy a finished property, and invest in building from scratch. If we consider that the construction cost of real estate is about 50% of the purchase price and annual price increases - 20 - 30% of the land purchase to selling the finished property will be several years, we can assume that Abramovich will earn 30 - $ 50 million USA. Even if the bubble begins to deflate before the time an investment project as a whole will be profitable. In contrast to the end customers - non-professional investors - Abramovich has this property at cost.

Foreign buyer is overpaying for the property in any case, because he does not know the real situation on the market, sees no long-term market trends and does not understand the factors affecting the real estate market in each country. The amount of the overpayment depends on the "culture" of the country and the mentality of its inhabitants. In more developed countries, foreigners, compared with the locals, overpaid a lot less than in developing countries, resort or southern countries. Thus, in Germany cost the same gifts for friends and for visitors. The mentality of the Germans simply did not allow to charge tourists more than with their fellow countrymen. And vice versa. In Egypt, Turkey and other resort countries, foreigners are considered by local people as a source of legitimate income. The cost of exactly the same services and goods for their own and others may differ in 2 - 3 times. The real estate market, in fact, are the same laws as the market of souvenirs. Instead of colorful local merchants are the nice, European-dressed salespeople. But the mentality is hard to change. Foreign "investor" in the eyes of the seller remains a source of easy income.

de-portal.com
Content tags: Overseas property
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