Auto Guide

Noted author and philosopher Mark Twain once advised “Buy land, they’re not making it anymore”. This off handed comment still carries weight over a century after Twain spoke the words. Owning land is perhaps the most basic monetary unit.

Stocks, collectibles, even money itself: none have a guarantee of holding value far into the future. Real estate, however, is timeless. As populations increase, the scarcity of unoccupied lands will greatly decrease.

Investing in land today is not just an investment in your future, but in the future of your entire family. Long after you are gone, your family could hold onto the property, using it for further investments or to live on for themselves. Despite the many great reasons to invest in real estate, there are still a number of different things to consider as you prepare to make the leap into land ownership.

The first thing to consider is what type of real estate is the best investment for your money. For instance, condos can be a great investment and even greater place to live. However, unlike home ownership, your control over the land itself is limited into the future.

Furthermore, you will need to decide at some point whether you would prefer to invest in commercial real estate, or residential. Commercial real estate can be a great investment, but you will have to be prepared to modify and redevelop the land to best suit the rapidly changing business world.

The next thing to consider is cost, or perhaps more exactly, timing. As the economy grows and shrinks so to do real estate prices. The best time to invest might be when the economy is at its weakest, as prices tend to be lower and you can get more value for your dollar.

However, you may have to wait a significant amount of time for the economy to recover in order to recoup your investment. If you plan on living in the property that you invest in, timing may not be as big of a factor. So long as you can make payments and keep the property in good shape, you have all of the time in the world to wait out a shaky economy.

As you consider these factors, your next step should be to consult a trained local expert. They will be able to go over your existing assets and determine a reasonable price range for your investment.

Once a price is set, they will show you a number of different properties that, in their expert opinion, may have a high resale value in the future, depending upon how long you want to keep the property. When it comes time for you to finally invest, look to land for the safest bet!

Despite its five thousand year history, US allied Bahrain is an ‘emerging’ nation and has been in a significant state of transition since the current king and former amir of Bahrain Sheikh Hamad bin Isa Al Khalifa came to power in 1999 and it’s critical that any investor examining the property market prospects in Bahrain for profit potential in 2007 and beyond understands the nature of the development of the country before they consider committing to it.

While the current period of transition now means that Bahrain has become one of the most prosperous and attractive nations in the Gulf region in which to live, work, invest and prosper, it’s rapidly expanding economy and significant political changes have created an underlying feeling of destabilisation among certain factions of the local population.

While generally speaking Bahrain’s property market prospects for 2007 are very positive indeed and this article covers the positive prospects for the market, it also details the underlying problems that could undermine the short term attractiveness of the country’s real estate sector so that investors can make as informed a decision as possible about market entry and investment commitment.

Since the current king of Bahrain came to power his nation has made incredible progress…on the political front Bahrain is now allied with the likes of the USA and UK, it has a free trade agreement in place with America, it has open elections and in 2006 the first ever female parliamentarian in any Arab Gulf country was elected into office in Bahrain. On the economic front the king of Bahrain has been key to the transition of his nation away from its economic dependence on oil and going forward into 2007 and beyond, Bahrain has a strong economy with very positive annual GDP growth rates.

All of these factors have indirectly started a property market revolution which is largely fuelled by international citizens moving in greater numbers to Bahrain to live and work. The reason for this is that Bahrain is located in an important strategic position in the Gulf and has taken it upon itself to be the nation offering least resistance to multinational businesses requiring a physical presence in the region. As a result of attractive legislation, transparent business practices and a low/no tax policy, Bahrain has succeeded in attracting large numbers of international and multinational corporations to its shores who each require a base in the Gulf region and who each recruit large numbers of international expatriates who are now moving to live in Bahrain.

This resultant strong inward migration of professional expatriates demanding housing saw Bahrain being one of the first of the Gulf nations to grant freehold real estate ownership rights to foreigners. This has meant that now international citizens and investors are buying up swathes of real estate as it comes to the market and forcing up property prices out of reach of the local population. In addition to this situation, supply of property especially in the main commercial areas is in limited supply which has also resulted in a frenzied rental market too which further excludes many local citizens – clearly all of this activity has created a feeling of frustration among local Bahraini citizens and it is this frustration that is causing an undercurrent of disaffection.

There is another factor affecting the housing market in Bahrain as well – as Bahrain is joined by a 25 km causeway to neighbouring Saudi Arabia and yet is a far more liberalised and tolerant country, Westerners working in Saudi are also choosing to live in Bahrain and to commute across the King Fahd Causeway rather than live directly in Saudi Arabia. On the one hand all of these factors mean that there is strong and increasing demand for commercial and residential property for sale and rent in Bahrain among an increasingly affluent international community – this means that in 2007 and beyond there will be a perfect environment in Bahrain for property investors to exploit.

On the other hand however there is mounting tension among those local people who cannot continue to afford the rising real estate prices. While this tension goes largely ignored some are starting to say that Bahrain has moved too fast in developing new areas of its economy and in allowing multinational companies to set up operations in the country. These multinationals have been accused of largely employing expatriate staff in a country where, especially among the Bahraini youth, there are significant unemployment issues and also minimum wage issues.

So, while international demand for property in Bahrain is strong and increasing and unlikely to subside in 2007 which means investors have a hot market to target, increasing land and construction costs and a growing division between local affordability and real estate prices is creating a very real environment of disquiet that should not go overlooked by an investor determining whether the risks of market entry outweigh the prospects for property market profit.