With buy-to-let properties management of your time is key22nd August 2012
I was reading in the FT over the weekend, that Buy-to-Let in England is a good asset to consider, “again”, within ones’ portfolio. Mortgages are less fluid for would-be buyers and rents are up so the logic is there. Yet such a statement made me think of the challenges of owning buy-to-let properties around the world.
Whilst I’m a partner at Athena Advisors, I am also a property investor, so it’s fair to say that I value how much time can and should be spent on a good buy-to-let. For me 2012 has been a year of struggles, having a portfolio spread across three countries, I was never expecting to have tenants suddenly defaulting at the same time. This is clearly one of the largest pitfalls of basic buy-to-let properties.
In the UK our tenant lost her job and defaulted immediately, but the procedure was smooth and within 3 months she was out with a repayment plan validated by the court. LandLord Action has been great with their legal support and the costs have been streamlined. There will be losses, but whilst time consuming, the process was reasonably swift and efficient
In Brazil, it was another story, a house being let out in Rio de Janeiro out experienced consecutive delays in rental payment. We had to use a specialised solicitor and whilst the fees were not outrageous the procedure was long and time consuming; reading in Portuguese and the jet-lagged dialogue lead us to spend more time than expected.
So after all this lost time in buy-to-let property I began to think about other buy-to-let investment destinations and there was one right under my nose; French leaseback. I am perhaps the only Frenchman who doesn’t own a leaseback in France.
So what is a French Leaseback, if not the best buy-to-let available in the world for individual investors? You are buying an asset dedicated for tourism in the most visited country in the world, so that’s a good start. You have no issues of tenants as everything is handled for you by the management company. If something is broken, no insurance, no international phone calls or a hundred emails on a regular basis. And lastly you get paid a regular income, net of all costs and paid on time periodically.
They key thing is the reputation of the management company. They need to have a dominant market position that can support the rental yields. But leaseback property really does stack up against other international buy-to-lets.
I think it’s about time I speak to the team about an in-house discount…
Roman Carel, Athena Advisors