Looking for the next hot spot, what should you consider?

If you asked an investor what they look for when considering property they would list a combination of the following; a favourable environment, guaranteed weather, good property prices and a strong rental market.  

Peter Loveday of Currencies Direct, the foreign exchange specialists, believes that through the strength of their local network in Spain, and as the first non bank provider of foreign exchange for individuals that they are ideally placed to comment. Peter believes “the area of Cape Verde and Canary Island property in general are an ideal starting point for people who want the best of both worlds. We have customers from all over the world, and we are in a unique position to become award of changing trends and the emergence of new markets.”  

Cape Verde seems to be able to provide the best of the surrounding areas in one place. It has the open white beaches of Barbados, the vibrancy of Jamaica, and a strong colonial heritage from the British and Portuguese. Cape Verde provides a warm welcome for investors with average temperatures of 25oC for the majority of the year, and between 10 - 12 hours of sunshine a day. Crucially however it is largely unknown to the UK market and therefore still retains a unique charm.  

However, financial decisions cannot be ruled by the heart alone, many investors have fallen in love with a location and then suffered due to them failing to do their homework. Peter offers the following 5 top tips to consider before parting with your hard earned cash.  

1. Accessibility
Proximity to the airport is only half the battle, it also pays to check that the location will be well served by direct and daily flights from the UK. The Canary Islands and Cape Verde are currently well serviced by a number of UK airlines, and Cape Verde recently signed an ‘Open Skies’ agreement with the US.  

2. Prices
The investment market has matured from the low cost model seen in central Europe. Opportunities in more developed markets, while seemingly guaranteed are oversubscribed and also fixed to a longer period before return on investment is realised. Canary Islands property offers huge potential, with average property prices around €208.000 making it very affordable and with a large potential for capital appreciation over the next 3 to 5 years. 

3. Rental Market 
The area is predicted to experience a 4x increase in visitor numbers in the next two years. With the favourable all year sunshine, very low rain fall, the topographical variety of the islands, investors should be assured that there will be a strong rental market for investors.  

4. Currency Stability
Cape Verde still retains its local currency the Cape Verdean Escudo, a throwback to its days as a Portuguese colony. However all property and international transactions are priced in Euros allowing for ease of capital inflows and outflows.  

5. Talk to a specialist  
When it comes to moving or investing abroad, not only do you need to be savvy about exchange rates when transferring money for the purchase, but you also need to be aware of extra fees that agencies and banks may charge you. Mark O’Sullivan, director of trading at Currencies Direct comments, “regular transfers overseas may be needed, perhaps to service a mortgage. High street banks can leave buyers out of pocket even after the first lump-sum transfer by charging fees of up to £20 on small successive transfers.” To ensure your returns are optimised and you receive the best possible rates you need to look beyond the high street banks.  Any foreign exchange specialist worth their salt should be able to offer you a considerably better exchange rate, potentially saving you up to £4,000 on the cost of an average property abroad, and many will not charge you any fees or commission for the pleasure.