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Investing in international property is an excellent way to diversify your investment portfolio and hedge against an uncertain rand, but how does one ensure you’ve invested in the right area, with the right developer, at the right time?
“A poor property investment, especially bought in a stronger currency like pounds or euros, can become extremely costly,” says Lisa Bathurst, who has made it her business to guide South Africans to good property investments abroad, particularly in the UK and Europe. “However, a good investment – and there are many good and surprisingly affordable options available – can boost a global wealth portfolio with yields of 7.5% and up, in a stable currency,” she says.
Being from the UK, with a long background in buying, renovating and selling properties, Bathurst established Hurst & Wills as a boutique international real estate advisory after she moved to Cape Town in 2015. Since then her business has gone from strength to strength, earlier this year announcing a partnership with Alliance, one of the largest property developers in the UK’s Northern cities.
“Our business model means that we are aligned with the buyer, not the developer, so our clients get independent, no-biased, balanced advice that helps them avoid bad investments,” says Bathurst.
Choosing the right developer makes all the difference, she says. If you deal directly with a developer, they will, obviously, only offer you their own developments. “Sometimes a development is just in the wrong location, by a street or two, but that makes all the difference to whether it will be easy to rent or not. Developers may mislead overseas buyers who are not aware of the nuances of certain neighbourhoods in countries they don’t visit often,” says Bathurst. “Developers may also be under pressure to sell those hard-to-shift apartments in otherwise successful blocks that for whatever reason are tough to rent out. If you do make a bad investment, recourse can be tricky as international developers often don’t have a presence in South Africa. They usually just fly in to do roadshows, sell properties and then leave again,” she says.
“Hurst & Wills prides itself on only working with reputable developers who have satisfied our own due diligence. These developers have been in business for many years and have successfully completed many projects that have achieved high occupancy rates,” she says. “As investment property is our core business, we visit the projects we are interested in several times a year – so we know exactly what is going on,” she says.
“Choosing the right property can be the difference between disaster and financial success and that comes down to knowledge of the market you’re investing in, and experience,” says Bathurst. “Our strength as an independent firm is that we are able to tailor a shortlist of investments that suits our client’s unique needs, in-line with their own wealth strategy and objectives,” she says.
“As we’re based in South Africa, we focus on developments that suit South African investors. Our experience and expertise make the process of investing in overseas property less risky. When you have someone you can trust advising you throughout the process it becomes a much more enjoyable experience,” she says.
“Hurst & Wills can also highlight the many other considerations an investor should be aware of before buying offshore. Issues such as cross-border tax planning, structuring and capital allowances all form part of the larger decision-making process,” she says. “We can also offer assistance on Golden Visa programmes in countries like Portugal.”
Over the last few years Hurst & Wills has had great success with investments for South African clients in developments in the UK, particularly the Northern cities of Manchester and Birmingham, as well as in Portugal, says Bathurst. “Many South Africans assume it is too expensive to invest in property in the UK but student accommodation is an affordable investment option. For as little as R1.3m you can own a full title offshore student studio apartment which is guaranteed to provide a steady rental income,” she says.
For more information on how to make a sound international real estate investment, contact Lisa Bathurst on 087 012 5281 or email [email protected].