A common question in the property scene is whether one should buy a south or north facing property.

South facing provides the best conditions for sunlight, considering factors like the difference between morning and afternoon sun. Suitable lighting and direct sunlight impact directly in a very significant way many things from mood to electricity costs. A south-facing apartment tends to be warmer in winter, and breezy and not as hot in summer.

You should also think about how you are going to use the house? Are you a night owl or an early riser?…..sunset or sunrise? How will you use it at different times of the year? Now that so many kids go to daycare and most parents work, many prefer a West-facing house or apartment because you get the sun and light in the evening when you are home from work.

However, when buying a property as an investment, it might be worth thinking twice about automatically going for a south-facing property. A study in Japan found that North-facing property is actually a better deal if you plan to resell that property.

On average, north-facing units tend to increase in value after purchasing from the developer, while South-facing units tend to depreciate.

This is an interesting point to consider when you are looking to purchase a new apartment from a developer.

Data on over 196,000 apartment sales from 2006 to 2010 was collected by Attractors Lab. The price of north-facing units on the second-hand market increased by an average of 11.4% from their original price when new.

The price of south-facing units, however, decreased by an average of 5.4% from new.

Some of the reasons for the change in prices are:

• Developers price south-facing units higher, and north-facing units lower.
• In the second-hand market, units of various types and directions appear randomly for sale.
• Purchasers will prefer a north-facing unit with a wider frontage and good views over a south-facing unit with narrow frontage and less impressive views.
• Many people prefer an open view that is not blocked by other buildings and are less concerned about all-day sunlight if they are both working full-time and return home late in the evening.

I’ve lived in both south and north facing apartments in Barcelona, and found advantages and disadvantages in both; I personally don’t have a firm favorite if I have to choose between the two.

Do you prefer south or north facing properties? Why?

Peer to Peer and crowdfunding real estate platforms are an excellent way to get into the property investment game, but as you get more involved into this industry, you are likely to come across private off-market investment opportunities.

By private I mean off-market opportunities that are typically reserved to a much smaller pool of investors and are found through connections in the real estate world. By writing about real estate crowdfunding and talking about it to my friends and connections at conferences, I eventually got in touch with some big players who deal in specific types of property investments.

While the crowdfunding platforms tend to offer a wide variety of properties, such as student housing, new developments, buy-to-sell, buy-to-rent etc, typically the private investment scene tends to be more specific in type and geographical region.

The reason is simple. You will typically find a person or small team who have been working in the industry for many years and have become experts in the market of a particular city or region as well as a specific type of property.

To take Barcelona as an example, I know real estate experts who specialize in obtaining some of the most dangerous and untouchable properties in the city (occupied by squatters, drug dealers, etc), clearing them out and totally refurbishing them to go on and sell for a tidy profit.

Others focus on foreign buyers who tend to be looking for higher-end finishing and specific locations and types of apartments when compared to the local buyers. Since most local developers focus on the local buyers’ needs, there is a niche that opens up that presents nice profits if you manage to meet the high needs of the foreign buyers as well as be able to market to them.

These are real niches with lower competition due to the extra skills needed to succeed. In the first case, you need to be able to know how to deal with very difficult and possibly dangerous people and probably employ people who will do some brute forcing to clear the spaces, and you need to be good at marketing to convince buyers that these black spots are now a great buy.

In the second case, you need to have knowledge of the traits of foreign buyers and speak their language. This will make it much easier to design an apartment for that specific buyer profile as well as know where to market it and then be able to seamlessly tour the apartment with potential buyers and deal with any concerns they might have.

[Read more…]