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Advice on property investment |
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Written by OffshoreWorld
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Saturday, 27 August 2011 |
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 Advice on property investment
Giovanni Caporaso’s latest book takes a look at property investments.If you are renting a property you would have heard this phrase at least a million times “Stop throwing away money in renting, buy your house, and use the rent money to pay your mortgage“. It sounds like a very convincing idea doesn’t it? But believe it or not, it is the worst advice someone could give you. If you do decide to do this you are blocking your credit or your borrowing potential
in a mortgage for your house, instead of investing in a property that you can sell on or rent, basically you are tying up your money and earning nothing! As a result of this you will find yourself with a cost and not an investment, statistics show that 48% of houses in Italy are bought using a mortgage, but they do not always become the family home.
In the USA hundreds of people have become millionaires by buying property on credit, certainly the credit system is different and has the weight of the superpowers economy on behind it, but it can also work in the European market, in maybe a slightly less pretentious manner but still rewarding. There are certain countries where property can be bought for as little as €3,000 -€4,000 ...... the cost of a moped. In this book you will find the necessary information to join the property ladder, even with a small amount of capital.
Property investment not only remains a good investment, but also the one preferred by Italians. Property investment can be more lucrative then one thinks, if for example you wanted to buy stock or bonds and had one hundred thousand euro available, you could buy stocks or bonds worth one hundred thousand euro or if you are lucky a little more. Yet with the same one hundred thousand euro you could buy a property worth two hundred thousand, using a mortgage of 50% or three hundred thousand with a 66% mortgage or even five hundred thousand with an 80% mortgage, in fact it is not hard to get a mortgage from your bank. They won’t however lend you money to buy shares, stocks, bonds, gold or diamonds but they will for property. Do you know why?..... for the simple reason that they believe it to be a good business venture. If they didn’t they wouldn’t lend you the money and might I add, at a rate much lower then any other business loan. If you buy a property for five hundred thousand and re-sell it for five hundred and fifty, its value will only have increased by 10% or fifty thousand, but this represents around 50% of your initial investment. Obviously the property can not increase in value immediately, the price could even decrease momentarily seeing that there’s not a safe formula for earning, but the risks aren’t high and if you buy well profit is guaranteed, in some cases profit can even be as high as 200-300% in less than one year.
 In various chapters we will analyze the types of properties and the speculation in this market. Italians always like to buy their homes given the tradition that property is a “safe bet “as it tends to keep its value. An astonishing 80% of Italians own the property they live in which means that at least four fifths of Italians think that property investment is a sound investment. In the rest of Europe the percentages are slightly lower, 60 % in Germany, 42% in France. Perhaps this is because the price of property is more consistent (especially in nearby France) but a huge factor is that Italians consider property investment to be the safest way even more than gold.
Although there has been less property development over the last ten years compared to other countries in Europe almost none of the new developments are destined for leasing, even the most conservative investor has decided that ”there’s no place like home“ . If you would like to know more about the book “Property investment in Italy and Abroad “ is on sale at www.expatsebooks.com (only in Italian, but the author gives advise in English from the web site www.immobilipanama.com ).
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