Newsletter January 2009
| January 2009 Update |
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Welcome
Happy New Year
fellow property investors! With newspapers full of dismal
predictions for 2009 it is difficult not to be filled with gloom. It would appear that, due to the financial crisis, the world is about to end and it is difficult to find optimism anywhere… recently on the BBC website: “How
do you define optimism?… …A
banker who irons 5 shirts on a Sunday.” It is difficult to
know who to listen to these days as the pundits making their predictions now were all completely wrong about 2008 and we are in truly uncharted waters in our inter-connected global finance system. So what to do? Find a bigger mattress to put your money under? My response in
these times is to focus on the fundamentals of the market and try to minimise my exposure to the various forms of risk to my capital and cashflow. Looking at the statistics of our website over Christmas (30% increase on usual traffic), it would seem I was not alone in searching for opportunities over the holiday period. With yields of 10-14% and 80% finance at low rates, Germany is still fitting the bill for me and will do so for 2009 and beyond. I suppose the biggest challenge to investors outside the Eurozone is the current strength of the Euro. More on this below. Anyway – I hope
this Newsletter provides some interest to you as an investor as you plan your activity this coming year. Best of luck in your investments this year – try and make it your best yet, despite the doom-mongers!
All the best,
Mat
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| Please click on the following titles to read the content or scroll down to read the whole newsletter |
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How is the strong Euro affecting your investment.
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Some positive outlooks for 2009
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Preparation for 2009
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Routes to Leipzig and links to travel sites
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Recent Property deals available
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Coming next month
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Strength of the Euro
Of most concern
for investors outside the Eurozone has been the strength of the Euro
since our last Newsletter in December.
for investors outside the Eurozone has been the strength of the Euro
since our last Newsletter in December.
The exchange rate against the
British Pound for example has dropped from around 1.20 Eur:GBP to
around 1:06 Eur:GBP (5 Jan 09). So what effect is this likely to
have? Well, all those who exchanged their hard-earned currency last
year to make investments are probably feeling very happy with
themselves. Additionally, the rents they are receiving on their
investments are now worth more if repatriated to their own countries.
British Pound for example has dropped from around 1.20 Eur:GBP to
around 1:06 Eur:GBP (5 Jan 09). So what effect is this likely to
have? Well, all those who exchanged their hard-earned currency last
year to make investments are probably feeling very happy with
themselves. Additionally, the rents they are receiving on their
investments are now worth more if repatriated to their own countries.
For those looking to make an exchange in the next 6 months, it would
seem your timing is critical. A number of currency experts, including
the foreign exchange team at Goldman Sachs, consider the pound to be
oversold and expect a return to a “true value” level of
around 1.30 in the next 3-6 months. With the Eurozone lagging behind
the UK and USA with regards to the effect of the global financial
crisis, this seems logical. Of course, only time will tell.
seem your timing is critical. A number of currency experts, including
the foreign exchange team at Goldman Sachs, consider the pound to be
oversold and expect a return to a “true value” level of
around 1.30 in the next 3-6 months. With the Eurozone lagging behind
the UK and USA with regards to the effect of the global financial
crisis, this seems logical. Of course, only time will tell.
I suppose
it is useful to remember that for those raising finance in Euro
through a mortgage, the effects of currency fluctuation are balanced
off fairly well. Often 80% of the purchase price will be in Euro so
only 20% will need to be exchanged.
it is useful to remember that for those raising finance in Euro
through a mortgage, the effects of currency fluctuation are balanced
off fairly well. Often 80% of the purchase price will be in Euro so
only 20% will need to be exchanged.
Finally, if you have not caught
sight of it, please ask for our currency fact sheet which provides
some guidance as to how to exchange your funds most effectively
including methods such as “booking a rate” when they hit a
pre-determined level. We also have contact details for foreign
exchange specialists, one of which also offers a hedging option which
would allow you book a minimum rate and then benefit if the rate
changes in your favour; which would be useful if you do not have to
make an exchange immediately.
sight of it, please ask for our currency fact sheet which provides
some guidance as to how to exchange your funds most effectively
including methods such as “booking a rate” when they hit a
pre-determined level. We also have contact details for foreign
exchange specialists, one of which also offers a hedging option which
would allow you book a minimum rate and then benefit if the rate
changes in your favour; which would be useful if you do not have to
make an exchange immediately.
Finance Update
Some good news
from the financial sector!!
from the financial sector!!
I spoke with our friendly German banker
this morning and he looks forward to another good year working with
our investors. The ability for the banks to finance our investment
objects at up to 80% loan-to-value will remain for the foreseeable
future which is good news for those who need to gear their finance to
best effect.
this morning and he looks forward to another good year working with
our investors. The ability for the banks to finance our investment
objects at up to 80% loan-to-value will remain for the foreseeable
future which is good news for those who need to gear their finance to
best effect.
A tour of other websites offering property in Germany
will demonstrate that 60% loan-to-value is often the best that is
achieved. How have we secured this higher loan-to-value ratio in
these difficult times for credit?
will demonstrate that 60% loan-to-value is often the best that is
achieved. How have we secured this higher loan-to-value ratio in
these difficult times for credit?
We have brought a good volume of
business to our favoured bank in Germany and they have recognised the
high level of security that our properties offer with such good
rental yields. This is demonstration of a genuine win-win outcome
for all.
business to our favoured bank in Germany and they have recognised the
high level of security that our properties offer with such good
rental yields. This is demonstration of a genuine win-win outcome
for all.
The latest rates (5 January, 2009) were given at 4.5% for a
5-year fix and 4.9% for a 10-year fix which are competitive for the
market and ensure excellent cashflow after all costs on our
properties which usually have net yields of above 10%.
5-year fix and 4.9% for a 10-year fix which are competitive for the
market and ensure excellent cashflow after all costs on our
properties which usually have net yields of above 10%.
Activity on the Ground
It has been a
fairly quiet period since the last Newsletter in December over the
holiday season. This has given us a good opportunity to catch up on
some existing deals and prepare for the New Year.
fairly quiet period since the last Newsletter in December over the
holiday season. This has given us a good opportunity to catch up on
some existing deals and prepare for the New Year.
Attached are the
latest 2 deals we are bringing to the market this month. Please get
in touch in you need more information.
latest 2 deals we are bringing to the market this month. Please get
in touch in you need more information.
In terms of our
activities in January, please see our website for dates when both UK
and German staff will be in town and able to show property that may
be of interest:
activities in January, please see our website for dates when both UK
and German staff will be in town and able to show property that may
be of interest:
Top Tip – Getting There
This month and next month we will be
looking at travelling to and staying in Germany.
looking at travelling to and staying in Germany.
For those of you who haven’t visited
Berlin or Leipzig yet, here are a few helpful links and some
information that should help you on your journey.
Berlin or Leipzig yet, here are a few helpful links and some
information that should help you on your journey.
There are 2 main airports in Berlin and
2 that serve Leipzig. For most investors from the UK, the budget
airlines EasyJet and Ryanair provide cheap and regular flights to
Germany from many airports in the UK. Both carriers fly to Berlin
Schonefeld and Ryanair also makes a daily flight to Altenburg, which
is near Leipzig (but not every day during the winter months).
2 that serve Leipzig. For most investors from the UK, the budget
airlines EasyJet and Ryanair provide cheap and regular flights to
Germany from many airports in the UK. Both carriers fly to Berlin
Schonefeld and Ryanair also makes a daily flight to Altenburg, which
is near Leipzig (but not every day during the winter months).
In our experience, the easiest route to Leipzig is to fly to
Altenburg, and then you can take the short bus ride from outside the airport to
Leipzig city centre.
Altenburg, and then you can take the short bus ride from outside the airport to
Leipzig city centre.
The other route to Leipzig is to fly to
Berlin and then take the fast intercity train, the ICE, from Berlin’s main
train station. For the English amongst us – German trains put ours
to shame; they are to-the-minute on time, clean and very fast. It is
best, and significantly cheaper, to book on line in advance – click here to visit the Deutsche Bahn English page.
Berlin and then take the fast intercity train, the ICE, from Berlin’s main
train station. For the English amongst us – German trains put ours
to shame; they are to-the-minute on time, clean and very fast. It is
best, and significantly cheaper, to book on line in advance – click here to visit the Deutsche Bahn English page.
Easy Jet and Ryan Air often have sales
where the price drops to 1p or even to zero (you just pay taxes) and
EasyJet often have discount codes that reduce the costs further. We
will keep you informed as we hear of them.
where the price drops to 1p or even to zero (you just pay taxes) and
EasyJet often have discount codes that reduce the costs further. We
will keep you informed as we hear of them.
Outside of the sales – we always use SkyScanner – which finds the cheapest routes and lists them in price order – with so many departure airports across the UK, this can be helpful. Your return trip should not cost you more than £50.
The final airline tip is that EasyJet
will let you on to an earlier flight if there is a space available,
for free; just turn up at the airport. If you don’t mind risking
flying back late, you can book a cheap off-peak flight and then
chance it with an earlier one.
will let you on to an earlier flight if there is a space available,
for free; just turn up at the airport. If you don’t mind risking
flying back late, you can book a cheap off-peak flight and then
chance it with an earlier one.
E-Book
As a new support
measure for our clients, we are developing a short E-Book which will
cover all the general aspects of property investment in addition to
some hard facts regarding investing in Germany.
measure for our clients, we are developing a short E-Book which will
cover all the general aspects of property investment in addition to
some hard facts regarding investing in Germany.
We hope to lauch the
Ebook (which will be FREE) around end of Jan.
Ebook (which will be FREE) around end of Jan.
Please let us know if
you would like to be sent a copy.
you would like to be sent a copy.
Latest Property Offers
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