I am really excited about the opportunities in 2008 and will highlight some of them below – it is crucial if you want an excellent 2008 that you write down your goals as soon as possible – and make sure you set tangible, measurable and motivational goals. As the saying goes, if you fail to plan, you plan to fail – and so many people I meet may say, “I hope to buy 4-5 properties this year” and at end of year have bought 1-2 and got distracted, or because they have not made millions with the first property seem to move onto something else.

1 and 3 year goals can do very well, and many investors that set strong goals and are very focused have done brilliantly over 3 years. Set goals you believe in and plan how to achieve – and have a great year! More on my thoughts on 2008 below.

Predictions for the UK property market in 2008

Let’s look at the UK first of all. It should not surprise you to know that I think there are some excellent opportunities in the UK in 2008. While the average house price/income ratio is now 9, meaning the majority of the UK is if anything overvalued, there are still some regions and areas well undervalued – as low as 4-5 times on the HPI ratio – which will prove to be excellent investments. While some investors like to target one off houses, which are below market value, I think it makes more sense to target whole areas where there are clear economic indicators that show they are under valued.

These areas offer very attractive figures for investors, yields as high as 7% (the national average is only 4%), local affordability is twice as high as the national average, and will clearly outperform the property market over the next 5 years – and this is already
happening.

I am looking to buy large numbers
personally in these areas, and will be recommending to our investors many of these areas – when they are 50% and more undervalued compared to the UK average price – this offers excellent value – and it is great buying under the true property value – note this is completely different to what the surveyor values the property
at. I truly believe the only thing
holding back the values in these undervalued areas are surveyors who rarely understand the true market values and only

base the values on historic values.

Vice versa some poor investors have been and will be left with negative equity due to paying inflated prices backed up by surveyors’ values – which were clearly higher than the true market value. So do not get too caught up in the surveyors’ values, and just be clear in yourself what you consider the true market value of a property and an area.

Keep looking at undervalued markets and regions with strong rental markets – and in general steer clear of areas that have house prices greater than 7 times the local salary – for most of the UK with average salaries of £20-25,000, this would rule out areas with prices higher than around £150,000. With some areas in the UK with house prices at just £80,000 there are some excellent opportunities!

I expect my existing UK property portfolio to grow in value by 10-15% this year – with the average “value” still only around £80,000 this is still significantly undervalued - and am looking to significantly increase the size of my portfolio this year. With 85% leverage this will offer returns of over 60% next year – which is clearly very good.

So some excellent opportunities – the best value areas in the UK went up in value by 20% last year, and I fully expect this to happen in the best value areas again – especially with interest rates due to drop by a further 0.5% this year.

Overseas in 2008

I now invest around 50% of my capital in Overseas buy to lets. The key reason for this is there are some economies growing at 3-5 times the rate of the UK economy as a whole, and there are many housing markets at very early stages – with finance markets
only just opening up – offering huge potential.

I would always look for a combination of undervalued markets, growing economies, a stable legal and political
environment, and significantly strong leverage – the rates of borrowing – available to foreign investors.

Combine all these factors and several countries and cities will stand out. For instance I recently looked at one country that has had a lot of press as potential

area of investment, but I found prices/m2 pretty high and no finance available yet, while a nearby country has prices/m2 almost half, with 70% finance available – a huge difference and shows one country in a far stronger light.

Countries like the Czech Republic and Poland, Turkey and 2-3 others will be prominent for us this year.

Again just as in the UK, there are
some great opportunities if you follow some sensible logic and understand the economies – but there are also opportunities that will lose you money.

Steer clear of over valued markets
where rental markets are patchy and supply outweighs demand – often a problem on new coastal resorts. I always look to buy where the locals are buying i.e. where there is a strong local market and strong economy – this will usually be large cities and towns in emerging countries.

Those investors who bought in our
developments in Brno, Wroclaw, Vilnius and Istanbul last year will have all done well, and those markets will continue to have excellent opportunities.

So overall 2008 should prove a fantastic year – great opportunities in the UK and Overseas – buy in undervalued markets with good leverage available and good rental markets where locals buy, and you will continue to do very well whether is in County Durham in the UK, Moravia in Czech Republic or Istanbul in Turkey.

Look out for some excellent deals coming through from us – in several markets we know well, and a few new ones!

Alan Forsyth runs two successful
property investment websites. He
also sends out weekly newsletters to over 8000 subscribers – sign up for free at www.property-system.com/7-part-course.html. He also writes for several property magazines and gives free consultations to investors.

All the best in 2008!

Regards

Alan Forsyth