10 to 15% deposit untill completion; Good capital growth expected; Quiet location; Buy to sell to local boyant market; Dont buy in Latvia untill you have spoken to us, we charge less than anyone else by nearky half
Description : Key selling points; 10% to 15% deposit untill completion exclusive to us 85% mortgage on valuation (not purchase price) Price per meter From 1300 euros Buy to sell to local market good location Latvia over 8% growth last year and continueing Price? 63000 to 140000 Deposit? 10% to 20% depending on size of investment Finance available? Up to 85% of valuation Price per meter? From 1300 euros Completion Date? End 2007 Rental return? 5% Units sold? 10 Units to sell? 108 How long has development been on sale? 3 months Finishing? Everything but kitchen Comments? Buy to sell on to local market. Location? Situated just outside Riga set in beautiful woodland and natural surroundings. 20 mins to centre 20 mins to seaside town Jurmala. Development? Four buildings evenly spaced apart. More info being translated Why should I invest in Latvia Riga, Latvia’s capital is undoubtedly one of the most beautiful cities in Europe with tourism increasing every year thanks to budget airline Ryan air starting flights in May 2004. It is the largest and most cosmopolitan of the Baltic states with the most vibrant night life to offer. The old town has the most beautiful architecture dating back to the 11t h century with a wealth of churches and merchants houses. The main reason we have invested here is because we feel safer investing in property that is appreciating because the economy is thriving and not because its a holiday destination with the only money coming in from people wanting second homes abroad. Property Market ; Prices increasing as much as 50% in some areas and coming up from a low starting point. One development actually doubled in value in the 18 months it took to build. Economics: Economically and politically stable. Just joined the euro in 2004 and high GDP (Gross Domestic Product) growth approx 6%, wages increasing 10% a year Low taxes; , No capital gains tax to be paid if you own property for more than one yearc Well developed banking system; Put down only 10% on developments till completion and borrow up to 85% of the final valuation and not the purchase price. Can borrow in 3 different currencies all with different interest rates. Rental demand; Good rent yields 6 to 12 % Geographically well placed, the capital of the Baltic states and spring board to the vast Russian markets. Property Market Property prices increased us much as 50% in some areas during 2004 and still the market remains just as busy. This along with a good rent demand in the centre and favourable borrowing from the banks makes for a potential 500% or more return on investments made now. Economics Due to its highly advantageous geographical location on the Baltic coast Latvia has for centuries been recognised as a significant industrial and international trade centre. Nowadays Latvia offers politically and economically stable environment for foreign business being an ideal springboard to vast Russian and EU markets. Latvia is a member of United Nations Organisation, Council of Europe, World Trade Organisation, Organisation for Security and Co-operation in Europe and Council of the Baltic Sea States. Since the restoration of independence in 1991, Latvia plays an active role in world affairs. Latvia has joined NATO and since 1st May 2004 is an European Union member state. Latvia’s GDP growth has been about twice as fast as in the EU. Between 1996 and 2000, it has averaged close to 5% annually, peaking in 1997 with 8,6%. (Latvian Development Agency) In 2000, GDP grew by 6,6%, meaning that Latvia enjoyed the fastest growth among the EU applicant countries, and proving that Latvia had overcome the slowdown caused by the Russian August 1998 financial crisis. The tendency continued in 2001, the growth rate reaching 7,7%. The main reasons behind the strong growth were domestic demand and exports especially to Russia as a result of appreciation of Rouble. However, during the first few months in 2002, growth of exports halted and the economic growth became more dependent on the domestic demand. In the end, exports grew by 5.4% in 2002. (Bank of Finland) At the end of 2000, Latvia had reached only some 60% of the 1990 GDP level and the GDP per capita income level was less than one-fifth of the EU average, being slightly above USD 2600. Rental demand Between 6 and 12% yields Rental demand is good in the centre although the market is what the UK would compare to as undeveloped as yet. Many locals will buy if they have the option to so it is important to buy in the right places when considering a buy to let option that it is close to the centre or in a desirable area. Low Taxes Tax on rents are 25% of rental profits (mines interest payments and expenses) If you own a property for more than one year you pay no capital gains tax If you own a property for less than one year you pay 20% capital gains tax. Notary Fee (stamp duty) is 2% of the sale value. Well Developed Banking system The banks in Latvia are well developed and keen to offer loans for real estate. This varies from 100% mortgages to Latvian citizens and up to 85% to foreigners. The most important factor is that the mortgage is given on the final valuation and not the purchase price. This is not even possible in the UK anymore and is most unusual for a small Eastern European country. Most projects are completed in one year so this means you get a good period of capital appreciation before completion. This appreciation is important as you only have to put down 10% deposit on most developments. So when complete you have enough equity to get a 70% to 85% mortgage. Example Buy an apartment for £100,000 Deposit 10% = £10,000 Appreciation at very lowest 10% in one year to when you take possession of the apartment £10,000 (This has been 100% in one year on one development I now of) Value £110,000 Mortgage offer (subject to your circumstances) at 85%= £93500 In this example the mortgage offer and your deposit exceeds the purchase price paid. I have been advised by the banks that they will give you cash back if this is the case, leaving money for furniture or a deposit on another apartment. With rentals being strong at 6 to 12 % yield a year in the right places, this will pay a 25 or 30 year mortgage easily and leave some money left. Having said this the rental market is quite undeveloped and you have to be very careful when choosing a development to buy on.