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Stacking an Overseas Property Investment for it's Capital Growth Potential



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By : David Garner    99 or more times read
Firstly, for the purposes of this article we need to make some assumptions. We will assume that the country or region in which we are investigating making an overseas property investment is receptive to overseas property investment, and there is a requirement/demand for rental property in the area.

In my opinion, the only thing that will lead to genuine, organic capital growth in any property investment, is demand. We therefore have to look at not only the current level of demand, but where that demand is coming from, why it is there, and what are the chances that the demand will continue or increase during the term of our property investment.

Natural, organic demand, to clarify, is demand that comes from the primary property market, from people looking for homes to live in and not any second home market fueled purely by overseas buyers.

There are many factors that will stimulate demand in a residential property market, and some of the factors that bear close examination are as follows:

The Economy, both local and national:

Is the economy thriving? (look at GDP growth. Are people working? (look at unemployment levels, are they increasing or decreasing?. Look at new businesses starting up in the area creating employment, more people working in an area creates a demand for rental and resale properties.

Demographics:

Are there currently enough houses/residences for the current population?, at what rate is the population growing?, where will all of the new residents live? Why would people want to move to live in this area?

Investment/Infrastructure:

Is there investment into the area's facilities making it a more attractive place to live? new community, sports, schools or medial facilities drawing people to the area. The biggest friend of property investment, especially overseas property investment, is urban regeneration and renewal!

Transport:

This is very often overlooked by novice property investors. Can people living in this areas easily commute to the rest of the city/region/country. Are there plans to improve transport links with new road and rail links to major centres of employment?

To summarise, if there is enough happening in an area to create future desire as a location for comfortable, modern living, then we WILL see growth as more people move to an area for work, or because they can now commute to work but take advantage of a better quality of life by having their home in a well planned area close to schools etc.

There are of course many factors to take into account but hopefully this article will provide you with a non-exhaustive list of things to look out for that successful property investors have been using as key indicators of property investment success.


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