Warning For International Property Investors
With the current financial crisis and seemingly bargain bucket prices for property in the US many international property investors will be tempted by the very low prices banks are offering for their “fire sale” properties as long term rental investments.
A note of caution needs to be injected here. There have been many reports of late coming out of America about the upsurge in theft from both empty and occupied international property investments in depressed neighborhoods where the surge in mortgage lending to those who could not afford it hit the hardest.
High Insurance Costs
These properties are bargains for a reason. The banks need to offload them so they can close the book and claw back some cash for their bottom lines, and the neighborhoods are in a semi derelict state. Insurance costs on foreign property are likely to be much higher.
The most popular metal theft from international investments at present is air conditioning units. The reason for this is because they are easy to steal due to their outdoor situation, plus they are made from large amounts of copper. The cost of copper has gone up hugely worldwide and metal thieves can earn big money from selling the unites to recycling firms for cash.
Soaring Metal Prices
Considering that since 2001 the price of copper has risen from less than $1 per pound weight to about $4 per pound, it’s clear to see how easy money can be made from theft. Many more metals such as aluminum are following along too, most see this is largely due to demand from industrializing nations like China. Recycling scrap metal industries generated $65 billion and processed in the region of 145 million tons of materials in 2006 [source: ISRI]
Items targeted can range from cars -to retrieve the platinum found in catalytic converters- to copper boat propellers or even metal roof gutters and fencing.Damage done to property can easily outweigh the value of the stolen items and as such investing in international property needs to be thought through carefully making sure all the potential risks are assessed.