Читать книгу Buying Real Estate Overseas For Cash Flow (And A Better Life) - Kathleen Peddicord - Страница 41

Earning Cash Flow from Real Estate Overseas Is the Same as Earning Cash Flow from Real Estate at Home … with These Three Important Differences

“It's perfect. I'll take it. How much is it?”

So said the Irish hairdresser to the Montenegrin real estate agent.

The agent was touring the young woman through an apartment for sale in the medieval town of Kotor. The woman didn't get past the entryway before making her buy decision. Indeed, she had been ready to invest before boarding the plane from Dublin. She was desperate to take her first step onto the property ladder but didn't qualify for financing at home in Ireland (the “do you have a pulse?” mortgages didn't become common in this country until a year later). No bother. Everyone was buying property abroad. She would, too.

The agent who sold the hairdresser that Kotor apartment told me the story when Lief met him the following week. We, too, were considering an investment in Montenegro.

It was 2004 and that agent (like all real estate agents in the country) was selling properties faster than he could count the commissions. All Europe and a few Americans like us were competing with each other to get into the hottest new property market on the Continent. Unlike the hairdresser, we didn't invest. The math didn't work.

That young woman from Dublin, like too many novice and even many experienced investors, was buying because she was certain the value of what she was buying was going to increase. She didn't bother to ask about the potential for rental yield or try to project the cash flow she could expect.

She (we assume and would have loved to have had a way to confirm), along with multitudes of other global property investors, learned the hard way and only four years later that, when investing in real estate, rising prices are not guaranteed. The 2008 crash wiped out values worldwide and, with them, investors who hadn't run the numbers but had bought for appreciation rather than yield.

Property values move up and down and matter only if you're selling the property. Cash flow can be reliable and is always bankable. Buying for appreciation is chasing paper profits. Buying for cash flow is putting money in your pocket.