5 Rules for buying overseas

Wherever you are buying in the world, if you are buying for investment purposes, there are five golden rules which you should try to abide by.

1. Why?
Why are you buying the property? Are you buying it as a holiday home? For capital growth? Many people see overseas property as a way to make a fast buck – a holiday home for free holidays, and a place you can rent out when you aren’t on holiday with the added bonus that the property price will grow significantly.

However, impressive price rises are not guaranteed and many of the high-growth areas are in high-risk areas. It is important not just to look at the best-case scenario, but also the worst case scenario – what will happen if you can’t rent the property out? What happens if property prices in the area stall? It is best to be prepared for all possible outcomes.

2. Research
So you think you’ve found the perfect property – but have you done your research? It is easy to look at pretty brochures and listen to agents’ sales patter however what is the reality of the property? Have you acquainted yourself with the local law on property ownership, inheritance and taxes? Can you get a mortgage – and how much deposit will you need? What are the future development plans for the area? What is the surrounding area like and will it remain that way? It is important that you hire a good lawyer to help you through the minefield of your overseas property purchase as they can advise you on the most common pitfalls and problems.

3. Income
Are you planning to rent your property out? If so, are you buying a property which will appeal to a large number of people? You need to find out what your target market likes – and check your property ticks as many boxes as possible. Check out the local rental market and see if the reality meets your expectations – it is a good idea to research the local property market on your own and not just listen to the people selling you the properties. It is best to consider any rental income to help cover running costs and not to make you a fortune – if it does make you any money on top of the running costs, see it as an added bonus.

4. Transport Links
Transport links are a very important factor. When budget airlines announce new routes to small regional airports in Europe, it helps the local property markets grow significantly.

If you can get a property ahead of a new budget airline route, it will probably help increase your bank balance. However, remember that a lot of these smaller routes are only there because local authorities pay the airlines to fly there. If there are any arguments between the airline and the local authority, the flights may stop (as was threatened in the French town of Nimes).

5. Resale
It is important to think about how well your property will do when you put it back up for sale – will it be easy to sell in the future? Obviously the better the property market is, the more the property is likely to fetch. However quirky, odd, high-maintenance or remote properties should be avoided as these will probably be quite difficult to sell on and only appeal to a few people. Check out how long your property has been for sale for – if it has been for sale for a while, ask yourself why.

Essentially, the overseas property game all comes down to research – know and understand your market well, and take on good professional advice and you will hopefully not go too far wrong.

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