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Coming Soon – An Interesting Product For Interesting Times
June 26, 2010Article by Ray Withers
Throughout this Budget Week, we have been looking at ways in which these straitened economic times can lead investors to be imaginative and try new types of product. More and more, successful property investment means – to use a cliché, though an apt one – learning to think outside the box.
The box in question is the standard product – the house or apartment, whether it is bought for rent, vacations or retirement (or, very often, a combination of these). This is the staple product of our industry and long may it remain so of course. But the discerning investor is starting to look beyond it, or rather looking for a rounded and varied package instead of a single product. One of the arguments frequently used against buying property overseas is: ‘but you’ll always have to keep going there’. It is an argument that was previously deployed against holiday homes in the UK and there are elements of truth in it. Investors are also consumers and they want variety rather than merely staying in one place. Yet amid the uncertainties of a new economic order, they crave security in place of constant flux. These two opposite but complemetary requirements are the Yin and Yang of the international property market. Balancing them is the greatest challenge for our industry.
Overseas property investment is going to be an increasingly many-sided affair. In yesterday’s blog, we discussed the green shoots of eco-investment. This arises out of genuine concern for the planet but, to take the arboreal metaphor a bit further it is part of a wider process of branching out. Investors are looking for a diverse portfolio, often ranged across several continents. At Property Frontiers, we are able to equip them to negotiate the complex – and increasingly interesting – global market and find investable products tailored to their needs.
In fact, we are about to launch a new product that is ideal for the diversity-minded investor. It involves co-ownership, with full title and the economic entitlements that go with it: Usufruct, in Legalese. This means that the client can own the fractional share of a property in a prime site, have exclusive rights to it at for a proportion of the year and the right to draw a rental income for a set period. There is a guaranteed 10% net return and a solid exit strategy. All the assets are in US dollars.
This package works equally well for an investor who wants to get his or her foot on the international property ladder and one who has already built up a portfolio of products, including rental apartments or plantation crops such as bamboo and sandalwood. It combines a new concept in ownership with security. It allows for personal enjoyment of the property and the possibility of excellent rental yields. What’s more, the location is superb. …
Keep in close touch with us over the next couple of weeks and all will be revealed. … And have a good weekend!
Written by: Aidan Rankin