Assetz® News - Follow the flights, overseas property investors advised

Follow the flights, overseas property investors advised

30th March 2007 |

Overseas property investors should look at going where the cheap flights are, experts have advised.

Speaking to Nubrick.com, Matt Havercroft, editor of A Place in the Sun magazine and Peter Conradi, author of the Fly to Let Guide, recommended a bit of forward planning before taking the plunge in the buy-to-let market.

Knowing where the cheap flights go is the key, as this is a key element in increasing travel opportunities, both for the frequent flyer and the traveler on a finite budget. As Matt Havercroft put it, "I think budget routes are clearly an important consideration when buying to let abroad, especially if the target market is a British holidaymaker."

He cautioned, however, that it was important to have the back-up of good road and rail links should a route be cancelled.

The rest of the advice given by the experts might be considered commonsense: research the rental market in the chosen area to avoid unrealistic income expectations. Check out the extra costs such as taxes and agents fees. Think about who the people letting will be to make sure their tastes and expectation will be met in terms of items such as furnishings.

In short, Matt Havercroft said, "planning and research is key".

So it may be, but how viable might fly-to-let be in the longer run? The cheap short-haul airline industry is booming, but few can have failed to notice that it's become the target of environmental campaigners opposed to airport expansions and concerned at emissions. This in turn has seen politicians hitting the industry with more green taxes, the aim being to curb the growth of the industry.

But will it? Some might expect the result of higher taxes on flying, as with levies on gas-guzzling cars, would lead to a change in consumer attitudes. People could opt to fly less and take more holidays at home. But against this, the projections that continued growth in the airline industry will lead to more emissions may not be fully considering the potential for the industry itself to become greener.

Speaking at the Greener Skies 2007 Conference in Hong Kong yesterday, Chew Choon Seng, chief executive officer of Singapore Airlines began by saying "it is right and proper that the airline industry, as a whole, is not in denial about aviation's impact on the environment and its contribution to carbon emissions, global warming and climate change".

In his speech, carried on the airline's website, he went on to point out that the Stern review, while projecting a 100 per cent increase in airline emissions by 2050 on current trends, also noted that these will still only account for 2.5 per cent of the greenhouse emissions total by that time and attacked governments for making airlines what he saw as convenient scapegoats.

However, he said, the industry had plenty to gain from measures like burning less fuel, not least in cost terms, which was already being achieved by the practice of gliding descents over New Zealand and taxiing on one engine at airports.

In addition to this, he added, new technology and new kinds of fuel, (perhaps the airline equivalent of the biofuels and hydrogen being used in hybrid cars now) may also help lower emissions.

The potential of technology to deliver breakthroughs in this field remains to be seen. But if it does, resulting in more eco-friendly flying, the justification for extra taxes on environmental grounds will diminish. In such circumstances, any possible knock-on effects on the fly-to-let market will diminish too.