II
How to Target Where to Buy
Five Strategies for Choosing a Property Market Overseas
I was in Montenegro researching the property market in that country in 2005. One real estate agent who toured me around told a story of a buyer she had worked with the previous week. The client was a young Irish girl, a hairdresser from Dublin who had decided she should get in on the worldwide real estate boom. She couldn't afford anything back home, as Ireland was already well overpriced (especially, I guess, for a young girl earning a hairdresser's salary), so she'd targeted Montenegro, a recognized up-and-coming market at the time. The real estate agent showed the girl several properties. When she walked through the door of one apartment, the Irish girl exclaimed, “It's perfect. I'll take it. How much is it?”
That's how nutty the global property scene was back then. Everyone was afraid of missing out. The thinking was, buy now and understand what you're doing later, a naïve and dangerous strategy predicated on two notions—first, that real estate prices could never do anything but continue up, and second, that a buyer would never have trouble finding another buyer when the time came to sell.
It's a very different world today, and a reverse risk is emerging. In the current climate of bargains and distress sales, the investor-buyer must avoid thinking, “With prices this low, how can I go wrong?” If you're looking for a place to live or retire, that's one thing, but if you're buying with expectation ...
