Before you buy, five factors to consider

When you have made the decision to buy abroad, it’s important to buy for the right reasons. Here are the top five factors you should consider before buying any property abroad.

1. Likeability
Obviously, you should buy something you like – it should be in a country you like, in an area you are happy with. Imagine the worts happens and your property has been burgled and you need to fly over late at night – if you don’t like the property, it will make the task of sorting the mess out so much worse. Also it is not a given that you will make money on your foreign property. If you buy something which has found a place in your heart, you will not be too upset if the place does not make you money, however if it does, the profit will be even more of a bonus.

2. The country’s economy
Particularly with the more emerging countries, it is important to understand the economics of the country. This way, you can understand why the property market may grow, and the factors that will affect the growth. It will also help you to predict what sort returns you will make on your property. It is best to try and find a country where the economy is improving from a fairly low position, and the growth is slow but steady and sustainable.

3. Rental Income
Most foreign properties are bought to rent out. It is therefore important that you work out a suitable rental plan. Remember to factor in things such as taxes and repairs when considering the rental income. It is worth having a small pot of money put aside in case surprises occur – for example some new developments will expect homeowners to pay for improvements to local access roads and surroundings.

If you are using a letting agent, they may use local electricians and plumbers who are more expensive than had you picked your own. Also remember that there is no guarantee that your property will have renters all year round – particularly if you are relying on tourists. You will need to factor in that you property may be vacant for a couple of months per year, bringing in no rental income.

4. Resell value
If you plan to sell your property at a later date, think hard about who might buy your property. Small flats may go down well in big cities where there are plenty of commuters and business people, but will not go down well in the middle of the countryside. Parking in a big city will also be a big bonus. Try to keep the property in keeping with what you think will sell well.

5. Square footage
Good things come in small packages! When looking at properties, calculate the cost per square foot between a studio flat and a two-bedroomed apartment – it might surprise you! Often, the return per square foot is actually greater for a studio flat than it is for larger apartments, both in terms of purchase price and rental value. With this in mind, it is possible you could buy two small apartments for the price of a larger one and get better rental and resell prices.

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