January has at last been put to bed – a month of diets and detoxes and general dreariness – but can February offer any excitement? Traditionally, Mardi Gras is a bit of an eye-opener, while for sports fans the Super Bowl is suitably restorative, but what about the rest of us?
A little flutter can sometimes cure the winter blues but the problem with investing in property is that – while there is a certain frisson to chalking up a profit – it’s not very fun. It has its moments, certainly, but with a typical holding period of seven to 10 years, it’s hardly what you would call a white-knuckle ride – not unless the market tanks, anyway, and that’s altogether the wrong kind of excitement.
So, with a time limit of say five years, is it possible to make a return and have fun in the process?
Henry Pryor, an independent property expert with 26 years’ experience, says there’s no substitute for treating property as you would any other investment class: with a clear eye on the bottom line.
Still, he concedes, life would be desperately dull if you didn’t try to inject a little excitement. He describes the fringe benefits of one investment he oversaw: “I had a client who bought something in the Caribbean specifically to impress the girl he was squiring at the time. While they were enjoying this little piece of paradise she became his wife – that, it turns out, didn’t work out so well – but nevertheless the value of the place went up a fair bit.”
Over 10 years the Lothario’s pad went from being worth about £750,000 to £3.2m.
Flipping a property – selling it for more than you paid for it – is the ultimate goal, but it’s harder than it looks. Burst housing bubbles in Spain and Ireland have left eager would-be property magnates with burnt fingers. But if you do get it right, you can see your investment balloon. Liam Bailey, of Knight Frank research, says that last year was very good for investors brave enough to re-enter the Dubai market. “Prices for villas there rose 20 per cent over the year, as investors from a wide arc covering Pakistan, India, Iran, the Middle East and north Africa looked for a safe haven for their assets,” he says.
Figures due to be published in the 2013 Knight Frank Wealth Report show that the cities showing the most house-price growth throughout 2012 included Jakarta (38 per cent), Miami (19 per cent) and São Paulo (14 per cent).
But you can get carried away with the end result of selling: renting out a holiday home when you’re not using it is an important way to ensure the investment pays for itself. Jessica Delaney, of Alpine Ski Property, thinks that if you were leasing out a ski property sensibly (making it available for something like 150 days of the year over summer and winter holidays) you could enjoy the slopes and still be aiming at 4.5 per cent to 5 per cent net yearly yield.
Picking a property that has the dream mix of fun and financial nous is the gold standard but, in the meantime, why not take a look at these properties we’ve selected? They’re priced around £1m, they’re fun, and if you sell them in five years, you might even see a modest return.
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Apartment, Méribel, Three Valleys, France, €1.26m
A new four-bedroom apartment in Méribel in the Three Valleys ski resort, two hours’ drive from Geneva international airport. The apartment, which was completed in December 2012, is within walking distance of the main ski lift.
Three Valleys is the largest ski resort in the world, with more than 600km of slopes, and Méribel is known for having one of the most lively après-ski scenes in the Alps.
François Marchand, general manager at Erna Low Property, says that Méribel has hardly been affected by the financial crisis, and forecasts property values to increase by 21 per cent over five years.
One sale through Erna Low Property www.ernalowproperty.co.uk
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Loft conversion, Soho, London, UK, £1.25m
This one-bedroom warehouse conversion is in Richmond Mews, central London. Soho, with its mixture of theatres, live music venues, pubs and clubs, has long been the home of creative Londoners.
Craig Simpson, sales manager at EA Shaw, estimates that the property could rise in value by up to 30 per cent in five years, partly thanks to the Crossrail rail project, scheduled for completion in 2018. One of Crossrail’s stops will be a few streets away at Tottenham Court Road, and the scheme will substantially cut travel times to financial districts in the east.
On sale through EA Shaw, www.eashaw.com
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Lamu Island, Kenya, £1.1m
A five-bedroom villa on the Kenyan coast. The closest airport is on the neighbouring island, Manda, a short boat ride away. International connections need to be made through Nairobi’s Jomo Kenyatta airport.
Lamu Island has some of the most picturesque beaches in the region, and the area is known for its traditional sailboats, or dhows. Research from Knight Frank shows that the Kenyan coast was one of the fastest growing property markets in 2011.
Attacks from pirates, though very rare, have occurred in the past. Edward Corry-Reid of Aylesford International says the government has vastly stepped up police surveillance from sea and air.
On sale through Aylesford International, www.aylesford.com
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Cane Garden Bay, Tortola, British Virgin Islands, $1.95m
A two-bedroom villa in northwest Tortola, 17km from Terrance B Lettsome airport. Overlooking Cane Garden Bay, the villa has an open-plan living and dining room, terrace and its own pool.
Cane Garden Bay is big for watersports and local jet ski and boat hire are available. The northeastern end of the CGB is also a hotspot for local surfers.
The property market in the BVIs has remained pretty static in the past few years, according to Knight Frank, but with the government’s plans to extend Tortola’s airport nearing completion – until now it has not offered direct flights to Europe or the US – improved accessibility might see prices turn upwards in the next five years.
On sale through Knight Frank, www.knightfrank.co.uk
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Apartment, Cascais Bay, Portugal, €1.457m
A three-bedroom apartment in a condominium overlooking Cascais Bay, 30km west of Lisbon international airport.
Residents have the use of the complex’s pools and gym as well as direct access to the beach. Quinta da Marinha golf resort is also nearby.
Despite Portugal entering its third year in recession, the future of the property market looks brighter thanks to stimulus packages such as the “golden visa” plan. This means non-EU residents can gain resident status by investing €500,000 or more in property, an intriguing prospect for Brazilians looking to move to a Portuguese-speaking country. dsf
On sale through Porta da Frente, exclusive affiliate of Christie’s International, www.portadafrente.com
This article has been subject to a correction and has been amended.