Foreclosed homes bidders 'should do their research'

Investors thinking of dipping into a US foreclosed homes auction have been warned by an expert to do their research before taking the plunge. Jamie Smith Hopkins of the Baltimore Sun warns advice from real estate investors suggests there is ‘no guarantee’ of getting a bargain when chasing a home put up for sale after being repossessed.

She writes asking prices could be more than houses are worth while some properties may require more work than some buyers can afford. The blogger also states:

“Some lenders keep a list of their post-auction properties - known as “Real Estate Owned,” or REO - on their Web sites. Countrywide, last I checked, had more than 250 in Maryland.”

Other tips include making sure you are prepared to pay a deposit before going to bid at auction. The Chicago Tribune also recently said property investors should go looking for foreclosure bargains “with eyes wide open” as a lot of hard work can follow a purchase.

Advice from experts quoted by the paper included looking out for heavy weather damage or vandalism to homes, and checking for old plumbing and electrical systems which could be costly to upgrade.

UK property investment up 21 per cent

British overseas property investment shot up by 21 per cent last year, statistics show. Figures from the Association of International Property Professionals (AIPP) say in 2007 the British spent a massive £246 billion on homes abroad.

Property investment company Obelisk also revealed the newer markets of Bulgaria, Turkey and Romania are catching up with the likes of Spain on the list of property investment choices, although the latter still holds more than a 25 per cent share of the market.

France weighed in at second with 17 per cent and the US was third with 9.7 per cent. AIPP chief executive Paul Owen, said:

“The choice available to the buyers is vast but big markets, even fast-changing ones like this, are relatively slow to make enormous shifts.

“When we add in other established markets like Italy, Portugal and Cyprus, nearly two thirds of property purchases last year were in established, familiar markets.”

However, the group added Bulgaria has been a “trailblazer” in terms of emerging markets, with six per cent of purchases by British buyers made in Bulgaria last year.

Mr Owen added:

“Bulgaria had almost a free ride as the emerging market for two to three years. It certainly made the most of it as it quickly grew market share. What is interesting in the figures for 2007 is that it has held up pretty well in the face of so many new entrants in the ‘emerging market’ category.”

Edinburgh top for student property investment

A report from experts Knight Frank has revealed student accommodation is now more profitable than most other types of property investment. According to Home Move, the company’s Bricks & Mortarboard Student Accommodation Review shows weekly rents for students are on the increase.

The site says the report lists Edinburgh as the best property investment hotspot for student digs due to the city’s lack of private and institutional bed spaces. Home Move reports:

“According to the report, student accommodation has seen total annualised returns of 10.2 per cent over five years and Knight Frank says it expects student property to continue to be more profitable than other property investment sectors for the next three years.”

The Independent has also previously said student digs are a hot bet thanks to rule loopholes. The paper reported flats in student halls of residence are the only forms of residential property that can be held in self-invested personal pensions (Sipps), offering tempting tax breaks.

A total of 21 schools make up the University of Edinburgh, contributing to the thousands of students who flock to the city every year for higher education. The institution recently unveiled a new scholarship ‘pooling’ scheme which will make it easier for firms to recruit gifted students.