Are you are looking for a real estate investment opportunity that is relatively untapped and has loads of potential? Eastern Europe may be the investment opportunity you have been waiting for. Eastern Europe generally includes:
• Czech Republic
• Slovakia, and
What is so special about these nine countries that makes them the possible location of a real estate investment windfall? These counties have joined the European Union in May 2004, making them a hot bed for up and coming opportunities in all aspects of their economy. Many people love to vacation in Europe and many of those people may be looking to purchase vacation homes. There are literally hundreds of homes and other buildings that hold hundreds of years of history and with a little restoration would be a real estate investment dream.
Joining the EU means a great deal for these countries economic future. You may be thinking that you have missed the boat and since these Eastern European countries joined the EU in May of 2004, all of the lucrative real estate opportunities are gone. Not so! Many investors are leery of throwing their hard-earned money at a project that they may not be sure is going to be profitable. However once we discuss in detail the opportunities and possible pitfalls of investing in Eastern European real estate you will be able to make your own decisions and analyses. We will cover each of the nine countries and ensure that all information, statistics, and projected investment success will be completely laid out for you with the aid of charts and diagrams.
Before joining the EU there were some restrictions placed on oversees and foreign investment opportunities. However, once the nine Eastern European countries have EU membership many of these restrictions will be lessened or removed altogether. It is very important to understand the ins and outs of these restrictions and laws of each country before you can determine which will offer the best real estate opportunities at the lowest risk. Please keep in mind that these countries have been under communist rule until the early 1990s, and adjusting to a more westernized way of thinking and dealing with business matters can take some time.
Another benefit to investors when dealing with countries that are members of the EU is that all countries involved are bound by certain rules and regulations that must be followed. This provides a great deal of stability for investors since the laws are consistent throughout the entire EU and economic collapse is highly unlikely. No one wants to invest in a possibly unstable opportunity so this makes it much more desirable of a location.
These nine countries also receive funding from the EU after they have joined. This is great news from a real estate investment point of view. Poland will receive the largest sum of money and you can be sure that most of these funds will be pumped into their economy. This increases the chances that a real estate investment in one of the nine Eastern European countries will be a profitable venture.
You may be wondering where the Euro fits into all of this. There are several countries in the EU that do not use the Euro as their primary means of currency. Being a part of the EU does not automatically mean that the country can use the Euro. However, in general it is very beneficial to use the Euro. Several benefits include:
• Fiscal stability
• Stable currency rates
• Interest rates will lower and stabilize
Adopting the Euro can take some time and typically will take years before it completely replaces the existing currency. Details about the Euro and the effects, both positive and negative, it can have on an EU country will be discussed in detail in a following chapter.
Of course, nothing comes without its risks and investing in real estate in the nine Eastern European countries are no exception. Their markets are less stable than the rest of the EU countries, which means it is typically cheaper to invest here initially and the possibly of a high return on your investment is great. However, there are no guarantees that markets will continue to rise or remain stable. There is no guarantee in any market, but even less of one in markets like the nine new members of the EU. Be sure to investigate all the pros and cons before deciding if investing in a high risk/high return situation is right for you. They pay-offs can be huge, but bear in mind that you could stand to lose a great deal as well.