North Dakota has enjoyed an economic boom since extraction of oil from the Bakken formation began, with the surge in workers driving up demand for accommodation in the area. That demand has opened up opportunities for high-yield hotels with returns of up to 37 per cent – a figure that has proven too good for investors to resist two times over.
In May 2013, buyers flooded into the oil-fuelled market. Only five months later, they returned for a second wave, as the listing attracted 265 enquiries across four weeks – over double the number of enquiries received by October’s second most popular listing.
The rest of the top 10 listings on TheMoveChannel.com last month struggled to compete with those strong returns. The second most popular property was a villa in Florida, offering 14 per cent yields. But open-minded investors looked further afield than America to find income, with a South African land investment stealing the third highest number of enquiries – the most attention the emerging market has ever received on TheMoveChannel.com.
More traditional destinations such as France were common choices, as the allure of personal usage of resorts in Picardie and Saint Augustin helped them make up the top five listings on the site. Student property continued to prove attractive, accounting for two of the 10 listings in October. Indeed, the 7 per cent returns typically available from university accommodation have shown the sector to be a reliable favourite – student housing opportunities have appeared in six Investment Watch reports so far this year.
North Dakota’s appeal has spanned an equally long period, though, appearing in four Investment Watch reports and receiving the highest number of monthly enquiries twice; an unprecedented display of popularity.
Simon Peck of Best Overseas Property Investments, who manage the hotel listing in the US state, explains why investors keep doubling back to North Dakota: “An increasing number of investors are becoming aware of the fantastic investment opportunity in North Dakota due to the uniqueness created by the demand from oil workers for quality accommodation near the Bakken Oil Field. There is nowhere else that investors can benefit from genuine net yields of 36% plus per annum.
“A prime example of a successful project is Great American Lodge just to the west of Watford city, which comprises purpose-built workers accommodation, phase 1 of which opened for rentals this week. Phases 1 and 2 are finally sold out and the remaining units in phase 3 will complete in January.
“This has been our most popular opportunity in the last quarter and we expect the remaining units to be sold out very quickly.”
Notes to Editors
Founded in 1999, TheMoveChannel.com is the leading independent website for international property, with than 400,000 listings in over 100 countries around the world, marketed on behalf of agents, developers and private owners.
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