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Determining where to invest your money

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You have weighed the pros and cons of investing in real estate in one or more of the Eastern European countries that have joined the EU in May 2004. How do you determine where to invest your money? In each of the nine countries, there are what seem to be endless possibilities, and you want to be sure to make the decision that is going to have the greatest possible return in the future.

There are many factors you need to consider when making the decision to invest your money. There is no guarantee that all of your research and investigating is going to pay off, but there are certain things you can do to ensure you make the best choice possible with the information available to you. You want to choose an investment opportunity that has the least risk possible (no risk is almost unheard of), and the greatest and quickest potential for capital gain.

The first factor to determine when trying to decide where to invest your money is which country. Typically, the Czech Republic, Poland, and Hungary are thought to be the least risk of the eight Eastern European countries. Several studies have been done on each of these counties, determining potential risk and capital gain factors. Some of these factors include:

• Politics
• Current economy
• Current demand by investors
• Corruption
• Tax rates
• Labor costs
• Market structures

However, this is in no way a guarantee and there are many reasons why the Czech Republic, Poland, and Hungary are not good areas for investment as well. There are many other factors you should also consider.

If you are finding it difficult to determine which country to invest your money in, you may want to consider which sector is the wisest choice first. Typically, the most profitable sectors are (but are not limited to) as follows:

• Shopping malls, strip malls, super markets – these types of structures can transform an area by drawing people to live and work there. Most people like to live close to their work and so once you have several businesses situated there the demand for housing increases.

• Tourism centers – the eight Eastern European countries will be trying to increase tourism revenue in the next several years. Tourism is a huge industry and can bring millions of people through a country each year. Investing in tourist centers can be a great opportunity, be sure to check into on-going projects and try to focus on tourism geared towards wealthy tourists.

• Business investment (large and small) – Check into areas that are drawing business ventures from other investors.

• Airline – Keep a close eye on airline routes to cities in these eight countries, if there are frequent flights or routes added you can be sure that tourism and business will soon follow.

• Universities - look at universities that are planning on drawing students from abroad and check into housing situations around the campus.

• Infrastructure – major roads, trains, and airports are necessary to bring in people. If an area is focusing on these developments, the means to bring in the people will be present.

• Technology – Areas that have technology parks are a great place to invest in real estate. Again, this goes back to the fact that many people want to live close to their work.

Be sure to do your research and determining where to invest your money will become much clearer. Going out on your own and hoping that any of the above investments opportunities will follow suit is rarely a good idea. By focusing on what is already, being built and looking into future possibly that they create you are more likely to make good real estate investment decisions and see the possibilities for what they are.

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