This week we talk to James Wyatt, a partner at Barton Wyatt, an award-winning estate agent in Virginia Water, the UK’s most expensive postcode outside of London.
To help our readers come up with ideas for future projects, we gave James £25k, £100k and £1 million to invest anywhere in the world with the objective of maximizing return over a five-year period.
Ashley Rigg: Hi James, thanks for talking to me today. How’s business at the moment?
James Wyatt: It was good until the stock market fallout a few weeks ago. It’s like someone has turned the lights out. Having said that, we’ve still got clients on our books actively looking for £20-million to £40-million properties. Property stock is very tightly controlled around here so turnover is low.
AR: Well I’m afraid that the money I have to offer you today pales in comparison, and to make matters worse it’s fictional! Let’s start things off with £25k. Where would you invest it to maximize my return?
JW: I’m going to go for Portugal. We have lots of clients interested in buying there because of our golf connections (the Barton Wyatt office is near Wentworth).
AR: Why Portugal in particular?
JW: It’s convenient, there are lots of flights to Faro from the UK, it’s not had the same kind of boom-and-bust and over-construction issues as Spain and I think there are areas that still offer value. For £25k I’d buy something in the hills behind the Algarve, about 30 to 45 minutes’ drive from the golf courses towards the coast.
AR: What can you get for your money?
JW: I think you could get a dilapidated farm building for that price with maybe up to half an acre of land. You’d have to spend that again to re-furbish it, more if you want a pool. You could sell it for £100k-125k after a year or two. A very tidy profit.
AR: Thanks James. Let’s add another £75k into the mix. Where would you invest £100k?
JW: The Middle East looks very attractive at the moment, relative to the rest of the world. It’s somewhat out of the loop from the current financial troubles due to its natural wealth and resources.
AR: Would you invest the money in Dubai?
JW: Probably not. I think there is better value in the neighbouring Emirates of Sharjah and Ras Al-Khaimah. The traffic in Dubai is a nightmare and you can often get from Dubai airport to Sharjah and Ras Al-Khaimah quicker than you can to Jebel Ali or even Jumeirah. Both are on the coast and are a lot quieter. The shopping is not as good, but they are playing catch-up and the great thing is they are learning from Dubai’s mistakes.
AR: Is there a risk of over-supply in the UAE?
JW: I used to think that, but there is just so much demand. In Dubai over the last couple of years, rents have more than doubled and the government has had to cap rent increases. There seems to be more and more international companies relocating there all the time. I think the boom still has a few years to run yet.
AR: What would you get for your money?
JW: You’d be looking at a one-bed flat for £100k. A two-bed would cost around £140k if you wanted to gear your investment.
AR: Anywhere else you’d consider investing?
JW: I’d also put money into Bahrain. Dubai is the commercial centre of the Middle East for most industries but Bahrain is the financial centre. It’s managed to capture that niche and it’s a pretty good one to capture. It’s also stable politically and I believe it offers good long-term investment prospects.
AR: Right, let’s make it interesting. Let’s put £1 million in the pot.
JW: Ooh, with that amount of money, I’d be tempted to put it in the bank and wait for some good deals in the UK market. There are some good developers in financial trouble and there will be some great deals to be had if you have the money.
AR: Cash is king, isn’t it? What if you had to invest right now?
JW: I’d put the money into Florida. I think the market is at or around the bottom. I bought there recently when you could get two dollars to the pound but there are still some great deals to be done.
AR: Anywhere in particular take your fancy?
JW: It’s all about location. I know people that have been burnt in Florida, buying at the peak of the boom in less sought-after locations. Personally, I like West Palm Beach, just north of Miami. It’s a retirement market but it’s smart Florida. You can get some real bargains at the moment. For example, you can get a 5,000-square-foot apartment with a pool for US$700,000 (£406,000). In Virginia Water, it would cost you £2.5 million for something similar.
AR: What would you do with the rest of the money?
JW: I’d go for Florida again but probably invest in Sarasota. It’s very much the capital of culture, with great opera and theatre. Some developers there will sell at up to 50% discounts. Many of them just need the money coming through the door. For US$1 million (£580,000) you could you get a 3,500- to 4,000-square-foot house in a smart location such as the Founders Club which will appreciate significantly in the coming years. Alternatively, there are more central locations where key-ready homes are available for around $200,000 (£116,000). In both West Palm Beach and Sarasota there is good rental demand and over five years I believe that you can make a significant return on investment and, of course, enjoy the lifestyle of the Sunshine state.
AR: Thanks James. Great talking to you.
JW: You’re welcome. Hopefully speak to you again soon.
About Barton Wyatt. Barton Wyatt is a third generation business in Virginia Water, Surrey selling and letting property in the UK and selling new homes on golf resorts around the World.Awards in 2007 included CNBC World top 5 Real Estate Agent, Daily Mail UK’s Best Estate Agent and Best UK International Estate Agent.In 2008 Barton Wyatt are again a Daily Mail award winner.
James Wyatt MNAEA, MARLA, TRC, REALTOR ® is a partner at Barton Wyatt International based in Wentworth, Virginia Water. Tel: 01344 843000
