property investment guide

© 2007 Tucana Investment Property – All Rights Reserved www.tucana-property.com

Property Investment Guide

Your Guide to Property Investment in Latvia & Lithuania


Meet George

• George would like toinvest for the future

• What’s important to George?– High Capital Growth– Good Return on his Investment– Tax Efficient Investment– Peace of mind by avoiding any high risks


Where should he invest?• George has read that investing in property in the Baltic

States is providing good returns

• But:– How good is it?– How can he find out more?– Who should he talk to?


George is right!• Lithuania and Latvia are the top two countries, in the

world, for property price growth• Top 3 worldwide Growth Rates in Property Values for

2007* are:– Lithuania 20.0%– Latvia 17.5%– Slovenia 17.5%

• Return on Investment of 300% + is not uncommon

* Source – Frank Knight Estate Agents - Jan 2007


Why Latvia & Lithuania?• Having emerged from The Soviet Union• Joined the European Union & NATO• Governments have invested in growth with GDP growth

in the 6-9% p.a. range• Currencies linked to the Euro €• The capital cities of Riga & Vilnius are particularly high

growth areas as they are they focus for investment and people migrate towards the capitals in search of “a better life”


George doesn’t want to miss out

But:• He’s not too sure exactly where Latvia is• He certainly doesn’t know anyone in Latvia or Lithuania • So, how can he invest his money and minimise the

risks?


Where are the Baltic States?


Where is Riga?


Where’s where in Riga?


Latvia – Key Facts• Capital: Riga

• Area: 64,590 km2

(Slightly smaller than Ireland)

• Population: 2.3m

• Membership: EU, WTO, NATO

• Currency: Lats (Pegged to €)

• GDP Growth:8.5%

• Inflation: 7%


Where is Vilnius?


Where’s where in Vilnius


Lithuania – Key Facts• Capital: Vilnius• Area: 65,300 km2

(Slightly Smaller than Ireland)

• Population: 3.4m• Membership: EU, WTO, NATO• Currency: Litas(Pegged to €)• GDP Growth:8.4%• Inflation: 6%


George is introduced to Tucana

• Who are Tucana?

– Tucana are Property Investmentspecialists based in Latvia, with offices in Lithuania and London

– Tucana help prospective investors find the right property and guide them through the full investment lifecycle


What can Tucana do for George?• Tucana spend much of their time sourcing prime

investment opportunities

• They have close relationships with many developers

• Built up over their 10 years experience in the region

• Tucana can find the rightproperty for George to invest in

• And guide him through the investment lifecycle

Sounds good to me!


What ROI can George expect?• A Capital Growth of between 15% and 25% per annum is quite realistic

• Some existing clients have gained over 80% p.a.

• With just 15% deposit as the investment

• And if rental incomes cover the mortgage payments (which they mainly do)

Purchase Deposit Other Expenses

Value After 3 years

Gross ROIAfter 3 years *

100K 15K 6k 170K 445%

* Figures are for illustrative purposes only Tucana Investment Property Ltd do not guarantee any potential returns on your investment.


Will George make that on any property?• In a country with high property growth, you should make

money on most properties, but like any investment, the more you know the better your choice.

• With an average growth in property prices of 17.5% to 20% some will grow faster and others will grow much slower

• “Guess who?” knows which are the best ones


How do Tucana know which is best?• Tucana are on the spot, they live there!

• Tucana understand the markets

• Tucana focus on smaller apartments, which are in high demand as younger people migrate to the capitals

• Tucana advise individual clients on individual purchases

• Tucana don’t block reserve and mass market apartments to investors


How much does George need to invest?• A typical One bedroom flat costs between

£60K to £100K

• 15% to 25% deposit will secure an off-plan property (sometimes 5% is enough)

• Full payment required on completion

• Up to 80% mortgages available

• Rental income should cover at least the majority of the mortgage payments and monthly outgoings


Why Buy Off-Plan?• Lower prices

• Deposit secures investment

• Benefit from price inflation of full value by only paying small % deposit

• Get ahead of the market

• Reduces Capital Expenditure


How did George find the right property?• He started by searching the Tucana web site:

– www.tucana-property.com

• Then called Tucanaon a local number:– UK +44 207 096 1247– Ireland +353 1657 1621


What did Tucana do?• Tucana took the time to understand what

type of investment George was looking for

• Then they emailed him detailed property investment packs for a number of properties

• Each of which contained the Tucana Investment Index


What is the Tucana Investment Index?• Measure of investment

potential• Based on:

– Capital Growth– Income– Location & Infrastructure– Quality & Delivery

• Each scored out of 25• 60+ is considered a good

investment

XX

CapitalGrowth

IncomeInfra-

structure

Quality

24

2220

20

86

e.g.


Tucana Investment Index• Capital Growth

– ROI over 5 years– Re-Saleability– Capital Growth

• Rental Income– Rental Demand in Area– Potential Rental Return– Proportion of Local Owners– Rental Management Value

• Location & Infrastructure– Catchments Area– Up and Coming Area– Synchronisation with Area– Local Amenities– Transport Links

• Quality & Delivery– Developer’s Record– Quality of Development– Time to Completion– Mortgage Availability/Rate

• Each category is scored out of a maximum of 25


Using the Tucana Index• George liked The Tucana Investment Index because it

enabled him to rank individual properties in line with his investment needs

• The Tucana Investment Packs clearly show how the Index is calculatedfor each property

• Any property with a TucanaIndex of 60 or more is likely to be a good investment


Property Chosen – What Next?• George soon found a

property he liked• But thought it was all too

easy• What about:

– Taxes– The Legal Side– Finding a mortgage– Renting it out– Selling it on

?


Tax Effective•No Capital Gains Tax after 1 year (Latvia) or 3 years

(Lithuania)

•Only 25% or 27% Income Tax

•Generous Allowances on costs of “buy to let”

•Latvia - 2% stamp duty (up to 2 properties) 3% (3 or more

properties) and 1.5% pa cadestra

•Lithuania – No stamp duty Figures correct when this presentation was created. Tucana Invest Property can not be held liable for any change in government regulations, property values, taxes or the level of investment gains or losses.


The Legal Side• No restrictions on foreign ownership of property

• Local currency pegged to the Euro, minimises currency fluctuations

• Friendly local lawyers fluent in English

• Fixed rates

• “Power of Attorney” means no need to visit


Finding a mortgage• Tucana partners with a number of local banks who are

willing to lend between 60% & 80% of Loan to Value

• Mortgage terms of up to 30 years, depending on your

age

• Euro based with competitive interest rates

• Re-mortgaging of UK property can also be arranged


Renting it out & Selling it on• Both Riga and Vilnius are capital cities in growth

countries• People are moving to the capitals in search of a better

future, creating a high demand for property and rentals• Tucana can handle the rental in-house and also partner

with several well respected rental management agencies• They look after all aspects of renting the property from

finding tenants to collecting payment• Choosing a well situated and well appointed apartment

will make renting and the eventual sale even easier


“OK I’m ready to invest”

• Just talk me through the process

with pleasure, first ….


The Investment ProcessCheck

Available

PassportUtility Bill

Pay Deposit & fees

International Bank

Transfer

Arrange mortgage

(if applicable)

Watch your

Capital Grow

Pay reservation

fee

Sign Preliminary Contracts

Arrange Power of Attorney

Arrange To Visit

Complete purchase

Internal Layout Build

Arrange letting

Wait while it is built

Choose Property


Does George need to visit?• Its up to George:

• Others prefer to see things first hand, experience the culture and view a selectionof different properties

• Some people rely on our comprehensive investment information and use our “power of attorney” service to purchase their properties without visiting


How can George get there?

Let Tucana know you are coming and we can arrange

transport and hotels.*summer only

UK-Latvia UK – Lithuania

Ireland- Latvia

Ireland-Lithuania

Fly LAL

www.flylal.lt

Air Baltic www.airbaltic.com Ryan Air www.ryanair.com Aer Linguswww.aerlingus.com *


What are you waiting for?•Don’t let George have all the best investments

•Go to www.tucana-property.com today

•Then gives us a call on:

–UK +44 207 096 1247

–Ireland +353 1657 1621

•Or drop us an email at [email protected] outlining your investment needs

Every effort has been made to ensure that the information contained within this document is accurate and correct. However, all information provided by Tucana Investment Property Limited is given on an “as is” basis and Tucana

Investment Property Limited or its staff cannot be held responsible for omissions or the accuracy of the information contained in this document.

This document is protected by international copyright law, copying or replication either in part or in full is strictly prohibited.

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