European Gloom - Britain's Boom?

I'm taking a well earned break this week on the Algarve in Portugal to get away from the rain & the post New Year Blues.  Well the good news is that if you think the UK is in a bad way then a trip to Portugal shows that it's far worse in Europe.  I was talking to a waitress in one of the local bars in Lagos and it appears that whilst an average salary might be 600 euros a month, rents for a small apartment are running at 400 euros making living almost impossible.  After an economic miracle fueled by excessive lending from governments and banks for property development, particularly holiday apartments the local economy has woken up to the fact that this alone won't sustain a vibrant local economy.

With Europe heading for austerity it makes me think that the UK outside the Euro has a sporting chance of fighting it's way out of the debt fueled mess.  Look at the way another small island country Iceland has managed to resurrect itself from it's banking crisis.

Threat to landlords

The big threat to landlords is that tenants hit by austerity and job loss struggle to pay their rent.  One way of potentially protecting a landlords cash flow is to take up rental insurance.  Personally, I have preferred to go down the route of carefully vetting my tenants first and then when in doubt obtaining a tenant guarantor.  If my portfolio remains fully let this will give me some fantastic positive cash flows.  Who knows with the gloom in Europe continuing to deepen and the likelihood that holiday apartment prices will keep on falling in holiday destinations I could well be writing my blog article next year from my newly purchased European holiday apartment.  European gloom could well be Britain's boom if we play our cards right.

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