Richard Brady answers the most asked seminar questions Article Published: 17:48 17/04/2007 Article Classification: Spectacular Villas Calpe Spain
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Olive Tree's Richard Brady answers the property questions most often asked at Olive Tree's regular seminars...

"I have been presenting at seminars all over the UK now, for the last couple of years and have met with a few thousand property investors. Whilst I can never predict what I am going to be asked next, there are some commonly asked questions that regularly come up..."

Where is the best place to buy at the moment?

"This is always a tough one, because it depends on you. Our first two questions for any potential client are...'Is this property purchase for investment or lifestyle purposes?' and 'What is your personal attitude to investment risk?' Once we have established these two points then we can move on".

"We end up with a shortlist of possible regions within countries and then developments within regions, budget then plays a major part in the shortlisting process and of course your personal preferences..."

Where have you bought recently?

"One of the temptations of a job like mine is that you often want to buy the first few plots on that brand new development overlooking the marina, golf course or on the beach. There is a limit of course to what you can buy! My last two purchases were in Cape Verde and Mexico"

What do you think about......Romania, Bulgaria, Croatia, Estonia, Lithuania, Montenegro..?(etc)

"I think it is quite healthy to approach any emerging market with scepticism. When you have spent the last 24 years in the investment business as I have, then you will have seen many new opportunities that people claim to be the next big thing. This does not always prove to be the case and it usually boils down to the fundamentals not being right.

The starting point is to ask yourself about the country's economic position; is it on an improving trend? Is direct foreign investment coming in? - If big companies are investing millions, that is often a sign that they believe in the area. What about the infrastructure, is it in place or being built? Is there a demand for property to meet or exceed the supply?

If the answers to these questions are positive, then there is probably a decent argument for looking to invest.

However that isn't the whole story; the next level of questions are as important, if not more so.

Is it a desireable location? Is it value for money compared with other more established markets? Who will buy this from me when I want to sell? What is the actual rental yield of similar developments nearby? - We tend to measure all developments by Euros per square metre, that way you can easily compare different developments by value.

I am concerned at times when I speak with investors who are buying in ex Eastern Bloc countries, purely because it's cheap or the country has a chance of joining the EU.

EU membership alone will not guarantee house price increases and the fundamentals still need to be there.

Cheap is hardly ever a reason to buy; if it could be sold for more money, then it would be".

How does Olive Tree make its money? What do you charge for your services?

"The price of each property that we have sourced, vetted, approved and OT Rated, includes a commission payable to OTIP by the developer for introducing a client. This commission has been calculated by the developer prior to marketing the property, as part of the overall marketing costs of a development, same as in the UK estate agency market.

The price of a property is exactly the same whether the client goes directly to the builder or developer to buy, or uses the services of Olive Tree. We do not usually charge a fee in addition to this commission, except in special circumstances and with prior agreement of our clients".

What is title insurance?

"Title insurance is a concept that is new to many UK buyers of property, but in America and Australia is commonplace. You are insuring the property against any subsequent problems or defects in the title (ownership) that could cost you money. The premiums are relatively low and we highly recommend it as providing extra peace of mind in any overseas purchase where it is available."

Can you arrange overseas mortgages and an independent lawyer?

"The simple answer to both of these questions is 'yes'. We have a network of contacts to help with all aspects of the purchase."

What due diligence checks do you carry out on a new development?

"This will be slightly different for each development, dependent on how much we know about the developer already, what the legal situation is in each country and how long the developer has been established. We have pages of information that we work through with our lawyers and the developer on developments.

If we have carried out an Olive Tree Star Rating, then that development will have had the most detailed checks. Some other sites in emerging areas, or plots of land in the pre-planning stages inevitably will have less. I think that the most important factor is that the client is aware of what we know. The key information tends to be confirmation of land ownership and planning approvals."