How to overcome 5 challenges when buying abroad?

Foreign property –  5 challenges when buying abroad? 

Unless you’ve fallen in love with a particular place, it can be hard to know where to start with your foreign property purchase.  This is doubly true if you’re buying property as a financial investment rather than a holiday home, when the economic fundamentals are much more important than your own personal preferences.  So if you’ve made the decision to invest in overseas property, how do you take the first step?

1) What is this property to you?

Before you start, it’s helpful to have a clear idea of what you want, whether that’s a seaside holiday home for your family or a city apartment with promising long-term letting potential, because that will dictate the location of your future investment abroad. 

2) Have you got some criteria in mind?

When you start viewing properties, try not to let your heart rule your head.  Of course it’s important to buy a property that you like in an area you find attractive, but don’t get carried away with your own enthusiasm.  It’s vital to remain objective, particularly if your foreign property purchase is intended as an investment rather than a holiday home.

3) So what sort of homework needs to be done?

Then you need to do your homework: spend some time researching different countries to identify which are likely to match your requirements and investment profile.  Have a look at high level factors like political stability and the economic situation in each country, as well as more practical considerations like language, tourism infrastructure and encouragement of foreign ownership.  Property Venture can provide information on several different countries and areas, to help you make your choice, such as guidance on due diligence.

If all this seems daunting, make sure you can take advice from people you trust, who can guide you through the property markets and the procedures you’ll have to follow for a successful purchase.  When you’re looking for a broker, solicitor or letting agent, recommendations from other property owners are invaluable and it’s always worth checking for membership of professional bodies.

4) Have you thought it all through?

Once you’ve chosen the country, get to know the local area and keep an eye on the property market.  You may have set your heart on a beachfront home, but if your budget is limited, you might find that somewhere inland is cheaper, just as appealing and still within easy reach of the sea.  If you’re planning to rent out your foreign property, establish how much demand there is – particularly during the winter months – and whether the local infrastructure is adequate to support long-term rental as well as holiday lets.

5) Is financing in place?

This is particularly true when it comes to finance.  Set your budget and stick to it, and make sure you get your finances in place at an early stage of the buying process.  It often takes longer to secure an overseas mortgage than in the UK and the process differs from country to country, so make sure you know what you need to do and how much time it is likely to take.

Financing isn’t just about getting a deposit and mortgage sorted. So do your sums so that you’re certain you can afford the on-going ownership of the property.  Find out about any service charges or local taxes as well as your mortgage costs.  If you’re buying the property to let, check that your occupancy rates and rental fees are realistic in the local market - this will determine whether the property can be self-sufficient or even generate income. 

By doing plenty of research and choosing advisors and developers you can trust, you can help yourself minimise delays and difficulties so that you can enjoy your foreign property purchase.

Posted 7th July 2009

Property Venture^® is an independent, UK-based agent. We help time-strapped investors and holiday home buyers, buy abroad by guiding through the buying process, so reducing the hassle. We visit the countries you buy in. Overseas members of NAEA. This means we have been subjected to the membership criteria and have signed up to follow the professional Code of Conduct established to help you, the potential buyer or investor, buy property with confidence.  

Copyright Property Venture^® 2009