Why invest in property ?
“90%
of all millionaires become so by owning property”
ANDREW CARNEGIE
It is
no shock that over half of the people on ‘The Times Rich list’ have
made their money via property.
A
house acquired for approximately £5000
in the 1970’s would be worth approximately
£250,000
today, an increase of almost 5000%.
In
certain locations, in Morocco apartments and houses have doubled in
value over the last 3-5 years.
On
average a property doubles in value every 7 years.
All the above are just a few examples of why property has been the
most consistent investment over the last 20 – 30 years.
Supply & Demand
The
main reason for the constant increase in property values can be
explained by using basic economics. If the demand for a commodity
exceeds the supply, the price will always rise. Population growth
compared to the lack of new houses available continues to generate
price increases.
Leverage and the use of OPM (Other People’s Money)
One
of the reasons why more people are now investing in property than
ever before is the increased availability of finance (mortgages).
If
you were to acquire £100,000 worth of shares, it would cost you
personally £100,000 . If you wanted to acquire a £100,000 investment
property, you could generally borrow at least 70% (£70,000)
and therefore only need to fund 30% of the acquisition
personally (£30,000) .
A Quick comparison
|
|
£100,000 Property |
£100,000 of
Shares |
|
Amount required
to purchase the asset |
£20,000 |
£100,000 |
|
If the asset grew
in value by 20%, the gain would be |
£20,000 |
£20,000 |
|
Return on
Investment |
100% |
20% |
|
|
|
|
Therefore, your investment has risen by 5 times more by investing in
property than in shares, by using leverage & OPM (other people’s
money).
Risk
Also,
£100,000 invested in shares could obviously rise in value. The
decline of the dot-com industry recently illustrated how quickly a
£100,000 investment can be reduced to zero.
The
probability of a £100,000 property becoming worthless is virtually
zero. There are of course peaks & troughs in the property markets
but historically, property always rises in value over the medium-long
term.
Options
The other major
advantage of Property is the options you have as an investor. If you
want to make a ‘quick profit’ you can Buy to Sell (also known as buy
to turn), whereby you merely sell the property on as quickly as
possible. Alternatively you can Buy to let, whereby you keep the
property and it generates a regular income for you. See other
sections of this website for further details on Buy to Sell and Buy
to Let.
Why invest in Morocco ?
With miles of un-spoilt
beaches & the same warm, sunny days experienced by other
Mediterranean resorts, the attraction is clear from the outset.
The
Attraction
* Property prices 50% less than
other European resorts
* Low cost of living
* Beautiful Golf Courses, Tennis
Clubs, & Riding Clubs
* Mediterranean climate
* Yacht club & berth fees for under
£27/month
* 10 year build guarantee (similar
to NHBC)
* French, Spanish & English widely
spoken as well as traditional Arabic
* Costa del Sol is just 30 minutes
away by hydrofoil once past the border
* Moorish culture at its best
* Enjoy a luxury lifestyle for very
little
It's Financial Benefits
Morocco offers additional benefits from a financial standpoint which
makes it a highly attractive prospect for purchasers:
* Low property taxes
* Safe investment – Notary
supervised property registration similar to France & Spain
* Easy repatriation of investment
should you re-sell in the future
* Only 20% tax on any capital gains
* Property market booming – average
rises of 15% per year achievable
* Rental occupancy reaching 85% most
years during the Peak Season
* 70% mortgages available with
current 7% mortgage rates
Its Currency
A
Euro equals 10.8 Dirhams, & a Sterling Pound equals 16.3 Dirhams.
The unit of currency is the Dirham (Dh), which is divided into 100
centimes. Business visitors are advised to consult their banks for
the current rate of exchange. No import of Dirhams is allowed.
Overseas visitors need to change their currency into Dirhams locally.
The Moroccan Central Bank (Bank Al Maghreb) fixes the value of the
Dirham using a basket of currencies including the Euro, Dollar and
Yen. The Dirham is not yet fully convertible.
