Starting in mid 2009 and I think continuing for much of this year, a different type of Torcana buyer emerged. These are men and women who decided to live very cautiously during a turbulent 2008-2009, but are now feeling comfortable enough with their financial situation to get back in the game and make some enquiries about the types of deals out there that might suit their budgets.
Whether you fall into both, one or none of these categories, 2010 is shaping up to be an interesting and potentially a very rewarding year.
UK Property Trends
Strange as it may seem to those concentrating on the Irish property headlines; prices across the water in England have risen for last six months in a row. According to the
Halifax Price Index, prices are now 9.4% above the record low of April 2009, thanks to a particularly strong November (1.3%) and December (1%).
The whales of the market are back in action too, with
Land Securities, the UK´s largest property company, purchasing a large site from Lloyds Bank in the heart of Glasgow´s shopping district.
Many commentators feel that
secondary stock will languish however, with prime city centre investments and London commercial property being the solid bets for 2010.
If you´d like to view a selection of our off market UK investments, please visit our
UK Property site, or email our Torcana UK Director on
andy@torcana.com.
USA - Outlook for 2010
The USA market is, as ever, extremely complex, dynamic and full of opportunities. Our prime focus continues to be in
Florida. Whatever the recession throws at us in 2010, Florida will always be a sought after location for a second home and better life for millions of Americans and foreigners. Don´t take my word for it alone and try not to get too distracted by outdated generalisations and rumours floating around. If you think something is worth looking into, please do your own research and get help from a range of professionals.
Government backed incentives have played a major part in boosting domestic demand. The main ones are the extension (to April 30th) of the $8,000 rebate for first time buyers and a $6,500 rebate for those who have owned a home for five years and are planning to purchase a new one.
Changing buyer attitudes
Our contacts on the ground have noticed a surge in activity in the $100,000 - $300,000 range, perhaps due to a shift in consumer perception away from lower priced to higher quality units. This is certainly in line with our own opinion that it is safer and more profitable to spend a little extra to invest in affluent areas with steady rentals. In short, I´d rather buy an $80,000 property that was $230,000 than a $50,000 property that was $145,000.
Don´t get me wrong, it´s very easy to locate a one bed for $40,000 or a two bed for $55,000, but they will often be small, with low ceilings, pre 2000 wooden construction, with a high percentage of foreclosures, a flaky tenant history and a poorly run home owners association. Many of these factors won´t be noticed by the average investor until after the property has been bought. These types of properties won´t get past our due diligence process.
Torcana in 2010
We will continue to market 2-3 very carefully chosen projects in the USA at any given time. Some prefer to use the scattergun approach by listing 10-15 projects on their website, but it´s too easy to make mistakes that way and we´d rather avoid that.
Our focus in Florida is almost entirely on affluent areas. We want product in the best part of Florida, and like the best parts of any city, state or country, they are far more likely to hold their value in the long term. If you want some equivalents in Dublin and London, we prefer Ballsbridge to Adamstown and Chelsea to Shepherds Bush.
We are always delighted to talk to people who are genuinely interested in learning how this market really works and why we pick the communities we advertise. We know that it takes guts to invest in property when the newspaper headlines and pub conversations are filled with opinion and commentary designed to scare rather than educate.
To buy or not to buy?
A smart move now (i.e. buying a quality property in a solid location at a large discount), can make an enormous difference to your long term wealth. You can leave €60,000 in a bank for two years and the more generous deposit accounts out there would show a balance of about €62,400 in January 2012.
If, on the otherhand, you bought a property for €60,000 with a tenant already in place, you´d have a discounted asset generating €500 a month in net rental income. In January 2012 you´d have accumulated €12,000 in rental income alone. If you bought the property in Jan 2010 at 35% of it´s 2006 value, and in Jan 2012 it was valued at a very conservative 50% of it´s 2006 value, you´d have made a €26,000 capital profit in addition to your income. If you wait 5 years instead of 2 you´d probably double that again.
Beats getting €2,400 from the bank doesn´t it ??
New Years Resolution 2012-2013
The problem of course, is that when the property supplements start publishing those kinds of positive headlines and people start talking about where they´ve bought and what it´s worth now, the best deals will be long gone.
If those headlines continue for long enough, I´ll probably be writing newsletters reminding people who bought from us in 2009-2010 that their New Years resolution should be to sell up and move onto something else.
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Visconti, Maitland, Orlando
Visconti, as many of you have already noticed, is our newest project and is located in the affluent suburb of Maitland in Orlando. On the face of it, this looks like a typically nice Orlando community with all the usual amenities, facilities and eye opening discounts. If you look deeper though (and we have a very long checklist) you´ll notice quite a few special characteristics.
Most importantly, 80% of the units are owner occupied - this is a landlords dream as it means the community is very stable and there will never be much competition for rentals.
The majority of the remaining units are tenanted and there is a tenant waiting list. Think about that - in a state where there are still tens of thousands of empty properties, people are still prepared to join a queue to rent a unit in this community!
We have very spacious south facing one beds (746 sq ft) with lake views starting at $78,900 (€54,300 / £48,800) and south facing two beds (1111 sq ft) with lake views starting at $103,900 (€71,300 / £63,800). Read through our brochure and you´ll see why these prices are terrific value for money.
Better still, net rental yields are between 8-10%...
Next Steps...
If you would like to learn more and receive a
full information pack including brochure, floorplans, location map and the latest price/availability list, please
click here and complete our short enquiry form.
