Location rules roost when buying property

HOW do you choose the right location to invest in real estate?

Your choice of location for any residential property investment will generally hinge on personal finances and the level of risk you are willing to shoulder.

Here are some things to consider once you have worked out how much you can afford to spend.

Economic basics: Look for areas with good prospects. Promising signs include strong population growth, investment in local industry, job openings, new supermarkets and chain stores. Vacancy rates can be a guide to good areas.

Low vacancy often means there's strong economic growth and development is not keeping pace. You can usually hedge against volatility in demand if you buy in a major population centre with many renters.

Renter convenience: Your future tenants will want good transportation links and access to schools, universities, shopping, dining, medical facilities and local amenities. Convenience for tenants will keep demand high.

Emotional baggage: Think like a tenant. Avoid making choices based on personal preference about where you would like to live or holiday. Consider the average income for the neighbourhood and rental affordability for those who live in the area.

Vision: What you see today might be a very different proposition tomorrow. Be wary of developments with similar offerings as they may be rental or sales competition. As Apple's late Steve Jobs would say, think differently. A unique property can boost your marketability, yield and long-term gains.

Diversity: If you live in Newcastle and invested there your home and investment properties would be exposed to the same economic swings. Manage your risk by putting your eggs in separate baskets. Land taxes and stamp duty are another incentive to diversify. Most state and territory governments base land taxes on the cumulative value of unimproved land other than your principal place of residence. Land tax on investment properties can generally be minimised or eliminated by dividing your holdings between states and territories to stay below their given thresholds. Stamp duty varies significantly from state-to-state so it pays to sit down and do your math.

Property management: Buy where you know you can hire a great property manager if you can't commit to doing it yourself. The best property in the best location can collapse under the weight of poor management and maintenance.

For the original post visit: http://www.heraldsun.com.au/realestate/investing/location-rules-roost-when-buying-property/story-fndcursx-1226573500521

SOFAZ purchases real estate in London

Baku. Vahab Rzayev – APA-Economics. State Oil Fund of the Republic of Azerbaijan (SOFAZ), announced on December 17, 2012 its first real estate investment, with the purchase of 78 St James’s Street, an office complex in London’s West End for £177 350 000.

The seller was RREEF Real Estate, the real estate investment business of Deutsche Bank’s Asset and Wealth Management division. Jones Lang LaSalle and Clifford Chance were the advisors to SOFAZ on this deal.

St James is a well-known prime location for exclusive office properties within London. 78 St James Street is located in one of the most prestigious parts of St James and is a Grade II listed building. 78 St James Street building was built in 1845 and was completely renovated in 2003 behind the historical facade and now corresponds to “A” class office building. The total area of this prime asset is 11 018 square meters and is entirely leased to HSBC Bank, which uses it as HQ of its Private Bank in the UK, until 2023. Annual rental income is £9.65 million and the net initial yield is 4.5% p.a.

Shahmar Movsumov, Executive Director of SOFAZ commented: “Sovereign Wealth Funds across the globe are looking for ways of diversifying their risks by expanding their investments beyond traditional asset classes. For the last decade SOFAZ has been growing rapidly both in terms of the size of the assets under management and its investment universe. Today I am delighted to announce SOFAZ’s first direct real estate investment. This newly acquired office building in London is the first in a row of planned property acquisitions in prime business districts of major cities around the world. The secure income that this type of investment will generate over the years coupled with strong fundamentals of prime office spaces in major world capitals are the determining factors in our investment rationale.”

The State Oil Fund of Azerbaijan, the sovereign wealth fund, was set up in December 1999 by the Presidential Decree as an extra-budgetary entity which accumulates and manages oil and gas revenues of the country. The Fund’s primary objectives are to help maintain macroeconomic stability in the country and to generate wealth for present and future generations. As of 01 December, 2012, assets of SOFAZ totalled USD 33 895 million.

Purchase of this property was realized in accordance with the amendments under the Presidential decree № 519 dated October 27th, 2011 made to "Rules on management of foreign currency assets of the State Oil Fund of the Republic of Azerbaijan". By the investment policy overall value of the investment portfolio can be invested into the gold, equities and real estate with maximum limit of up to 5 % per each financial tool.

For the original post visit: http://en.apa.az/news/184578