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Investment in property has been recognized
as the unfailing means of acquiring wealth. The phrase
‘safe as a house’ is clichéd. Yet,
it is the only truth in the context of return on investment
scenario. Return on investment in property is a slow
process. However, it is an investment that never fails.
History also testifies to the fact that investment
in property is a minimal risk investment. The return
from the property, services the investment. The net worth
grows over time and generates income for further investments
in property.
Like any other investment, Property investment
is a skill which has to be learned. The investor must
be aware that there are risks attached to any kind of investment.
He must also consciously acknowledge the fact that during
the process of investment the risks attached seem to be magnified.
He must also accept that, the right choice
of property, combined with considered management are absolute
essentials in any property investment. Property investment
is a serious business that requires the right kind of commitment.
Before actually launching into the purchase
of a property, the investor must be clear as to the purpose
of investment. If investment may be for:
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Personal use
-
To buy and Let
The purpose will determine the type and location
of the property. In the former instance property may
have to be located close to the place of work or near an educational
institution. The type of property may not per se
be of importance. Its location may be important.
In the latter case all aspects of the property assumes importance.
It is a property purchased as an investment and the investor
expects a return on property investment.
Investment Property should be selected keeping
in mind the following environmental factors:
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High employment area
-
Attractive buildings and surroundings
-
Public Transport facilities
-
High capital growth
-
Developing areas
-
Low maintenance costs
-
High demand by letting agents
The Return on Investment (ROI) expected will
include factors such as
-
Appreciation of the asset
-
Regularity of rental income
-
Long term stable tenants
-
Care by property managers.
-
Tax benefits
Investing in foreign countries requires an
understanding of the laws and systems as it impacts on investment
by foreigners. It also requires an understanding of
the socio-economic fabric of the country as it will have a
bearing on the value of the property.
Therefore, before investing in property in
a foreign land requires the investor to stay in the country
for some time or a study of the socio-economic-demographic
and political setup of the country in so far as it impacts
on foreign investment in the country.
Investment in property in Egypt is encouraged
by the country. The ownership of land by the foreigners
is accepted as a mode of development and is encouraged by
the Government. The laws that govern foreign investment
are Law no 15 of 1963 which specifies that no foreigners can
acquire agricultural land. The Law no 143 of 1981 stipulates
that Foreigners can acquire desert land within the limits
prescribed under the law.
Partnerships can acquire upto 10000 feddars(hectares)
while Joint Stock companies can hold upto 50,000 feddars.
It also stipulates that 51 percent of the shares or capital
in these companies should be held by Egyptians. The
Lease of such land is also governed by this law. No
land can be leased for more than a period of 50 years.
The law no 230 of 1996 limits ownership of real estate by
foreigners to prescribed amounts.
No foreigner can hold more than two real estate
properties throughout Egypt for residential purposes.
This is in addition to the right to own real estate needed
for activities licensed by the Egyptian Government.
The total area of such real estate cannot be more than 1000
square meters. The real estate cannot be a historical
site. If the foreigner needs to own more than two properties
he must obtain permission from the Prime Minister.
Ownership of property in tourist areas is
subject to conditions established by the cabinet of ministers.
Moreover, foreigners are required to build on vacant lands
owned by them within a period of five years of acquiring the
land. They can only sell their land after five years
after registration of ownership. If they wish to sell
the land earlier, they must obtain the consent of the Prime
Minister.
Despite the above restrictions imposed on
foreigners wishing to invest in Egypt, it is a fertile ground
for investment. The benefits and opportunities are many
and varied. It is the springboard to the Middle East,
the Mediterranean and Africa.
The financial and political stability, low
financial risk on investment, the free market mechanism, liberal
foreign exchange rates make it attractive to investors.
The Government has also made an all out effort to create a
favorable climate for investment.
basic
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Property Buying Process |
Egypt
Real Estate Investment Potential |
Egypt
Property Investor's Country Guide |
