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22 | International finance
A vendor perspective
At Rightmove Overseas we take advertising from
both ends of the vendor spectrum, from private There are amazing bargains out
owners looking to sell their restored longére in
Brittany up to multi-million pound schemes in
Dubai. What unifies them in this climate is the there driven by market motivations
need to stand out from the crowd. When the
numbers of proceedable buyers diminish, but the
stock volumes remain in over-supply, simply that are very different to only a few
putting properties on the shelves and expecting
them to be snapped up will not secure comple-
tions. For most locations it is absolutely a buyers short months ago, but unless the
market so sticking heads in the sand and pre-
tending everything is okay and the things you
did yesterday apply to today is a recipe for stag- deal you get is out of this world, you
nation.
Advertisers seeing success are those willing to
adapt their offering to achieve cut-through and should still apply due diligence to the
invest to acquire interest. This can be painful for
private owners or smaller single project develop-
ers if they are not able to divorce emotion from location, character and facilities of
the sale and treat the transaction like the business
it should be. It’s a huge risk to hang on to an
asset that may not see appreciation or even the properties you buy into
return to value for years to come, so facing the
brutal facts, recognising you need to lock in what
gains you have and secure the sale at anything therefore of you securing a property that a) ber it was valued at previously (in some markets
above cost, could in the long run prove sensible. appeals to a wide enough market of this type of essentially meaningless now) and there's the
Rightmove advertisers can take advantage of buyer and b) at a price that makes sense are pret- number the bank wants to clear it or the devel-
showcasing properties at the top of search results ty slim. Better to recognise that justifying a oper wants to cover their costs and secure the
or email campaigns to our subscriber base. If lifestyle choice with some rationalisation about it next round of funding.
you’ve signed up to our newsletter or email being an investment is a self-serving and just buy In the case of repossessions in particular, prior
updates you may have seen these. If you are not what you would be happy to live or holiday in. to the bank taking over, the developer would
advertising with Rightmove, I'd suggest ensuring Play safe, don’t buy holes in the ground, don’t have had all sorts of motivations and emotions
you have a good mix of wide coverage with high- buy off-plan, and don’t buy in left-field coun- bound up in the price they wanted for a given
ly trafficked portal, and explore some small local tries, but in well established markets with strong property. To the bank it's just business driven by
sites with niche offerings who likely will let you ex-pat communities. If you were targeting Brits, the need to clear liabilities from their books and
advertise for free. Google PPC can be worth this means perennial favourites France, Spain, present decreasing numbers to shareholders and
exploring, but popular, generic keywords will be Portugal, Florida and Italy. Get the property on markets.
expensive, so I'd suggest only bidding for specific sites like holidaylettings.co.uk and just enjoy it There are amazing bargains out there driven
terms referring the local area you property or for what it is. If you struggle to find the time to by market motivations that are very different to
development is in. search, try a bespoke service like Cavendish only a few short months ago, but unless the deal
If selling is undesirable or would result in neg- Brooke (+44 (0) 207 429 0344). you get is out of this world, you should still apply
ative gains, you may be able to extract greater For more aggressive investors, market condi- due diligence to the location, character and facili-
yield from the property (or at least tread water tions have left some rich pickings from develop- ties of the properties you buy into. Look for
until prices pick up) by renting it out on short ers under pressure from falling interest and rental guarantees, proximity to airports and
term holiday lets. Rightmove's sister company prices, and their banks drive to shore up balance tourist facilities and developers with good history
www.holidaylettings.co.uk specialise in this field sheets. The banks supporting many of the devel- and reputation. Assessing quality of a company
and will be able to offer lots of advice. opments are not as free with releasing funds for abroad can be tricky so look for trade associa-
progressing to the next phase of a development tions and charter marks, for example Association
An investor perspective because they’re nervous about when returns will of International Property Professionals members
There are two main streams available aligned materialise and are tightening up on terms and (www.aipp.org.uk) subscribe to voluntary code
with the serious buyers left in the market: per- defaults. At Rightmove we have several partners of conduct and sanctions.
sonal properties for long term appreciation and working directly with Spanish banks for example Put yourself in the bank or developer's shoes,
holidaying or business-driven bargain hunting to who have large portfolios of repossessed or when making an offer. They could have no sales
capitalise on vendors in distress. Chasing hot defaulted property that simply has to be removed at unrealistic prices or some sales at a price that
spots is extremely high risk in this market as you from their books. We're also hearing more stories achieves their aim. Best story we've heard this
are relying on optimism and confidence which from developers who have been put on notice year (for the lucky buyer) was a project with 10
are in short supply amongst purchasers. Chase that they need to be servicing their debts to the apartments left, originally marketed £325k,
value, not hot spots. banks and demonstrating sales before any more priced down to £220k. An investor approached
For personal properties, it's absolutely a long funds will be released. the developer and said "I'll take all ten for £1.1m
game and actually better not to think of it as an At this level, properties cease to be emotional now. Each week the price goes down £100k."
investment at all. Purchasers in this market are purchases and they become simply numbers on a Aggressive and cheeky yes, but I'll leave you to
buying to match their taste and lifestyle and balance sheet. There's the number the property guess how many weeks the developer held out
essentially each purchase is unique. The chances was built for, the raw cost, then there's the num- for…
March 2009 Investment International www.investmentinternational.com
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