Is ‘Fly-to-let’ a good buy, or pie in the sky?

As the Western property market crumbles, pundits are extolling buy-to-lets in such far-flung places as Colombia and Mongolia. But are the potential rewards worth taking such a risk?

As well as the more traditional ways of monitoring the housing market, a quick glance at the weekend property sections can give a good impression of what is happening. As the Western property market has started to crumble, articles for increasingly distant buy-to-let destinations have appeared in the weekend papers as property pundits struggle to find sensible investment opportunities.

"Chasing profits to the ends of the earth," was The Sunday Times's headline for Peter Conradi's article suggesting several far-flung investments. "As recently as a decade ago, who would have thought of buying a flat in Tallinn, Sofia, or Prague?... Few people had even been to the Czech Republic, let alone contemplated investing their hard-earned cash there," says Conradi. But prices are now falling through the floor "anyone who bought a new-build off-plan in Tallinn, the Estonian capital, in 2006, will find it worth 10%-15% less once it is completed this year", admits Conradi.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Ruth Jackson-Kirby

Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings accounts and credit cards to pensions, property and pet insurance.

Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.

Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping, among many other titles both online and offline.