Where I'm Looking to Buy Right Now

Saturday, Jan. 5, 2008

Read more about international real estate in International Living Postcards--Saturday Edition

“What are the best real estate investment opportunities for 2008?” Here are four markets that have my attention as we move into this new year:

Cambodia. The real estate market in this country has evolved dramatically over the last seven to 10 years. Today, the local housing market is booming. Friends and contacts who have been building houses and flipping land in Cambodia report profits in recent years of 100% and more…per year. Impressive returns, no question, but realizing them can be complicated. Foreigners can’t own real estate in this country directly, so you need to work with a local partner. And, of course, it’s not easy to find a local partner you can trust, not only here but anywhere, so this market isn’t for everyone. However, if you’ve got a portion of your portfolio ear-marked for high-risk investments, this country deserves consideration.

Bottom line, this market offers the potential for extraordinarily high returns…but this comes with an equally high risk.

The Philippines. This market is opening up, and it’s now possible for foreigners to own condos directly. Manila has seen good appreciation over the last few years, but I wouldn’t say that’s the play right now. I think the up-and-coming resort destinations of Cebu and Boracay are the places to look this year.

There are many new construction opportunities. Buying pre-construction to flip may make sense, but buying to rent could have more potential. Proposed rental returns for condo-hotel units range from 10% to 12%, which is well above the 5% to 8% return you can typically expect worldwide. These yields won’t hold up long term, but you can expect these higher-than-average returns until the market becomes more discovered and purchase prices are pushed up (which will lower rental yields). Meantime, you should see good capital appreciation, as well.

The Philippines are less risky than Cambodia and still offer the potential for well-above-average returns, both from capital appreciation and rental.

Romania. Now is the time to invest in Romania, as there is a steady increase of tourism, resulting in plenty of opportunities in the short-term rental market. There is also a growing demand for apartments in the capital, Bucharest. I've never been able to say this before about a market...but in this city right now, it's almost impossible to not make money on the right type of real estate deal (Publisher's Roundtable members have been briefed in full on this opportunity, more of which below).

Poland. Poland has already seen serious appreciation of values and should continue to do so for the coming years as its economy continues to expand. It’s the biggest market in Eastern Europe and still hides many pockets of opportunity, both for local residential housing and commercial rentals. Krakov has been an area of rapid growth, which will continue.

Here’s to new opportunities and a profitable new year.

Lief Simon
For International Living

Editor’s Note: Two weeks ago, IL Publisher's Roundtable members received an International Property Alert briefing from Lief on the abundance of real estate opportunity in Bucharest right now. New members who join today will get instant access to this report.