Diary

Best areas for real estate investment

Where to Buy in Athens – The Map You Need!

Like any city there are good places and bad places to buy in Athens.

Know Your Exit Strategy Before You Choose Where To Buy

It’s not just to do with the local economy but more to do with your exit strategy. Who do we see as the ultimate buyer of a given property? Local families? If so can they get credit? Foreign investors? If so do they need a Golden Visa or simply looking for yield?

We use Google Maps to Target Our Investments

We use a map overlay from Google maps to help our team on the ground understand our reasons for investing in the different parts of Athens. And the local team often disagree with us, but they only have local drilled down knowledge of the market, not a global vision of how the rest of the world sees a Greek recovery.

And that’s really important for us because almost entirely independent of the economic nonsense made worse by successive Greek Governments there’s a tourist industry in Athens that almost didn’t exist pre crash. Although ‘controlled’ like in many other cities and limited to 90 days per property, there are ways around the Airbnb rules in Athens that are legitimate and that allow an investor to obtain a year round rental from short term lets.

Every Investor Will Have Different Arguments About Where & Why…

That’s a viewpoint that is very different from that of the mainstream market of mums and dads buyers in Athens. But exit strategy and mitigating holding costs are important.

So by area we have different priorities, different kinds of deals we will and won’t do, and different appetite for risk.

Exactly Which Areas Are Best?

‘Best’ is subjective.

We’ll be starting a series of articles drilling down into each of the areas of Athens – the good, the bad and the ugly but for now here’s a copy of the map we use with areas marked out that are of interest to us.

On the map you’ll find some notes we made about each of the areas. Some of them overlap and some are really niche.

Athens Real Estate Syriza Elections 2019

2019 Greek Elections – What Does it Mean For Real Estate?

2019 is an an election years in Greece.

Why Does This Matter?

Elections in Greece are like a crazy free for all. After the current Government got into power by promising Greeks free stuff like money and taxes on the rich and saying no to the Germans, the Government did an immediate about turn and an literally rolled over for the EU.

Greeks have not forgotten this and the Government ruling party – uber left Syriza – has been involved in scandal after scandal involving corruption, incompetence and all the usual ills associated with left wing governments.

Sadly the opposition is the same old guard who messed up the Greek economy last time. Although it would be hard to see how much worse even the cause of the 2011 crisis was than the total mess the current Government have made of it.

Well as non Greeks we are mainly interested here in what the outcome of the next election might be in terms of how it affects us directly as property investors, foreigners in the country and the economy and property market in general.

So what is the good the bad and the ugly likely to look like after the 2019 Greek elections?

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Will Athens Property Market Crash

Will Athens Property Market Crash Again?

There’s talk everywhere online about the impending crash in 2019

Housing prices in mature markets in places like London, Vancouver and Sydney have taken a bartering recently.

This means that when we tell investors that we’re buying property in Athens their first reaction is usually- you must be crazy!

But is it really so crazy? Everyone knows the great Warren Buffett made all his money buying when the ‘experts’ said ‘sell’.

Property is a weird one. People behave in strange ways in the property market boom and bust cycles.

Here’s an example (borrowed from Robert kiyosaki). When you go to the supermarket and they have a BOGOF on your favroite cookies, do you buy more or fewer packets?

Of course you buy more. Doh!

So why is that when we talk of real estate markets we find people including investors it must be said, who stop buying when prices are low?

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8.4pc Yield From Athens Property

8.4% Yields from Athens rentals?

Can a broken market like Athens really beat established markets like UK/USA/Australia? Let’s find out.

Athens Rental Yields can be superb but watch out for hidden costs

In the UK rents may appear to be high historically but when compared to the prices of buying real estate the numbers rarely stack up.

Investors have for years been buying in London and the south east of England for equity growth. It seemed it would never end.

In Sydney where the Australians missed out on GFC 1 (don’t worry guys you are the new sub prime bomb to set off GFC 2 this year) investors were even more hung ho and bought properties with so called negative gearing – where the monthly interest only payments are up to 2x the actual rental income.

Hello?!

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British Investor Falls Over Greek Real Estate

Case Study – British Investor Falls Over in Athens

The Unfortunate Tale of Mumbles

Whilst investing in Greece has its risks it’s also pretty straightforward provided you follow some basic rules and employ some common sense.

That brings us to today’s case study.

An investor from the UK that we’ve known for some time came over to Athens to shadow us for a while and start buying in Greece. We’ll call him Mumbles.

This was a guy with a long history of investing in property in the UK but perhaps not that worldly wise when it came to other cultures. He expected everything to be exactly the same process as it was back home.

On paper, it is.

Creative contracts are pretty much the same wherever you are in the world.

But the nuance, the local info, the things that are totally market specific, if you don’t get a handle on those you will come unstuck. This is what happened to Mumbles.

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Motivated Sellers Athens Greece

Case Study – Motivated Seller in Athens

This is a really interesting deal and shows what can be achieved with some creative thinking and a willing and motivated seller.

The seller had bought his apartment in 2008 just before the GFC and still some time before the Greek crash of 2011. This meant he was one of the many Greeks who bought on bubble valuations with loans granted by the Greek banks with little or no checks. Sound familiar?

How to make money on this contract?

So the seller who we’ll call G, could no longer afford to keep paying the mortgage on the property. He thought the property, which was in a nice middle class suburb of Athens, not far from the beach, was valued at around €250,000. His bank debt was €170,000 and his total debts were approx €260,000. When we met G at the apartment we talked through why he was selling, what his situation was, his plans for the future, etc.

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Using Greek Lawyers

Lawyers, eh? Gotta love ’em.

If you’ve ever seen some old Charles Dickens type story with lawyers sitting in dark wooden rooms with shelves of dusty books behind them, well that could be Greece in 2019. Let’s just say the way lawyers work is a little different from anglo countries.

Some surprising things about Greek lawyers…

They’re social animals – they love to dine out on your dollar!

They like to get out of their offices and go and meet sellers’ lawyers for a chat and a coffee. But guess who’s paying for that? One foreign investor we know (we’ll share his story one day) racked up a bill of thousands of euros because he didn’t stop his lawyer from going to view properties and negotiate with sellers.

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