Taking the leap to invest in property abroad should always be very carefully considered. Will returns really be all that much better than what could be achieved in the UK if the right property is uncovered? And there will be additional expenses to consider. Buying a property abroad without investing in getting to know the country’s property market and making at least a visit or two to the location being considered to get a real feel for it is a high risk lottery.
Property management fees will eat into rental returns as you won’t be able to handle things yourself and if anything does go wrong you will be dealing with an unfamiliar legal environment in a foreign language. Having to hire a good lawyer who also speaks good English is unlikely to be cheap. For it all to be worth the additional trouble and risk, the potential upside on investment properties abroad would have to be pretty tasty.
However, if that hasn’t put you off, it’s not to say that a property investment abroad can’t work out well. Many buyers looking outside of the UK also take the more circumspect approach of combining a dream holiday home with investment aims. Resort property is risky as an investment as fashions change in terms of destinations, which can seriously impact rental returns. If lots of holiday rental property is also built in a particular area the increased competition can also push down rental rates and potentially even lead to undesirable vacancy periods.
But despite all that, if the motivation is for a property to be first a holiday home and secondly an investment property, with it not being a disaster if the investment side of things doesn’t work out perfectly, why not!? Life is only lived once. One holiday home/investment property destination currently popular with Brits with a taste for winter sports and the outdoors life during the rest of the year is the Austrian Alps. And from an investment point of view, it also ticks a lot of boxes.
The Austrian Alps are quickly becoming the most popular ski area for tourists from the UK. British visitor number were up over 3% last year to a new record and the trend is expected to continue this year with the number of flights to Innsbruck and Salzburg increasing significantly. Other factors in Austria’s favour from an investment property standpoint is that the Austrian Alps have a longer season than many other areas on an average year, snow coverage is among the most reliable in the Alps and property prices are also 28% lower than in other Alpine countries. Another factor in Austria’s favour is relatively limited numbers of properties ever available on the market, with new development tightly controlled.
When choosing a location the choice is generally between an established resort area such as Obergurgl and Sölden in the Tyrol. The Salzburg area, however, has lower prices and Zell am See-Kaprun-Saalbach is also a popular destination for skiers from the UK. Slightly riskier but with greater potential upside are properties in smaller, up-an-coming ski areas that are seeing significant investment in new lifts and pistes. Bramberg is a good example of a previously sleepy Alpine village until recently off the international ski radar where prices have risen significantly due to ski infrastructure investment. Other villages tipped to take a similar development path over the next few years include Neukirchen and Wagrain in the Salzburg area.Risk Warning:
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.