Even though things are not stable at the moment, buying a property abroad isn’t really any riskier than buying one int the UK. One of the main factors that you need to consider is that each country will have it’s own rules, regulations and legal requirements, alongside different processes.
No matter what country you are looking at properties, there is some common factors that you need to think about. Before signing any agreements or paying any money you should have a look at the considerations below.
Get The Right Legal Advice
Just like you would with any house purchase you make in the UK, it’s imperative that you consult and listen to the advice of a lawyer. You need to make sure that they speak English, and also are qualified to practice law in the country you are considering buying your property. The lawyer will conduct searches regarding the property you are looking at, as well as the land it is built on, this allows them to identify any hidden dangers such as whether the land is in a greenbelt or at risk of natural disasters like flooding. They will also be able to clarify whether to property has been built using the right permits, which will ensure you aren’t at risk of your new property being demolished.
Add It To Your Will
Whether you have a will in place or not, you need to ensure that your property is included correctly in your will. This way if anything was to happen to you or your partner, then the right information on how to deal with the property is clear and available. This might not be one of the first things you think about but it should definitely be something that you sort with haste once you have purchased.
Make Sure You Research Your Location
If you move locally in your home location, chances are you are going to know a little bit more about the potential local issues. For example, if you buy a property in the UK you’re not likely to have to deal with many natural disasters such as volcanic activity or hurricanes. If there have been any floods in the area, you’re likely to hear about this on the news and be well aware of the locations that are at risk. However, when buying property abroad, you need to do your research into the area. You’re also more likely to encounter natural events that could be potentially disastrous for your new investment. You should make sure that you research the local neighbourhood, see if there is a neighbourhood watch, your distance to the local amenities and find out the crime rates. If you want to stay away from things like nightlife then it’s a good idea to familiarise yourself with how to spot them in different countries. Signage can be very different from what you use to identify things in the UK. So, if you’re looking for Bargain Spanish Homes, make sure you do your research on all the local areas.
Research The Construction Company And Look At Local Advice
If you’re buying a new build property. Whether it’s an apartment, villa or house, you should think about looking at the reviews about the construction company. You may be aware of several construction companies both with good and bad reviews in the Uk but there is different one operating in other parts of the world. This means that you should try and find out if any companies are known for shabby work, cutting corners or have a fantastic reputation. Understanding the construction companies that have built the property that you are buying could save you from making a huge mistake and investing in a low-quality build which will mean you have to spend a lot of money in the future, keeping up with improvements.
You should also seek advice about the land that the property is built on. This will ensure that the foundations aren’t going to lead to major problems in the future such as sinkholes or subsidence.
Understand And Know What Your Are Signing
In the majority of countries, contracts that are created are created in the local language and if you don’t speak it fluent this can pose a problem when buying a property. You may also find it difficult to understand the legal terminology. It’s essential for you to find a good translation service to fully translate any fo your documents. If you don’t understand your contract, you won’t be protected or may not realise what you’re signing. Make sure you know everything that is included in a contract and if you have any questions the make sure you get the answers before you sign. Never sign anything until you are in full understanding.
Managing Rental Properties
It is becoming more and more popular for foreign investors to buy properties abroad with the intention of renting them out either as long-term lets or short-term holiday lets. If you are thinking of purchasing a property with the intention of making an income you need to think about how you are going to managing the property. If you are going to be living locally you could manage it yourself however that would mean that you need to be able to manage contracts.
If you’re not going to be in the local area then it might be more suitable to utilise a management company to help you manage the lettings. You will need to pay between ten and fifteen per cent of the rental income to the company, if you don’t want the stress of managing the property yourself it’s often very worth the investment. You will also need to think about how often you want to check and visit the property yourself. This way you can ensure that it is up to standard and that the management company is looking after your property properly.
Get Advice On Tax
If you already own a property, buying a second one can mean that you are liable for paying certain taxes. Getting advice on the tax situation is strongly advised. In the country, you are looking to buy and the country of residence as you may be responsible for both. Many countries have double tax treaties which help to prevent people from being taxed twice on the same income. However, you should still use a qualified tax consultant to help understand and file the right taxes. This is even more true if you have bought the property as an investment opportunity. Capital gain and income tax are going to apply in multiple jurisdictions.
How Are You Funding The Property?
You need to think about how you are going to pay for the property. Do you have savings that enable you to buy outright? Are you releasing money from your current property? Or are you looking for a mortgage? Just like in the UK, there are different types of mortgages available in different countries, however, the rules and regulations surrounding them will differ from country to country. Also bear in mind that mortgage suppliers may also be reluctant to deal with foreign nationals. You should always get independent mortgage advice if you need to find the funds for your property purchase.
Make sure that your personal finances are in good standing before you sign any contracts. Local laws will always side with the seller if the deal fails so if the finance that you have chosen gets rejected you may end up been committed to paying a large sum of money if the sale collapses.
Consider The Currency
Once you have made the decision about how you are going to pay for your property, you are likely to have the need to convert and transfer a significant amount of money for the deposit and final sale. This is something that is commonly overlooked and you might find that some banks are reluctant to transfer large sums overseas. You will also need to think about how cost-effective it will be to convert the sum of money, consider opening an account with a foreign exchange company, you are more likely to get a competitive rate.
If you think about when you convert smaller amounts of cash into another currency at times you can be left with a smaller percentage and the value of your deposit can massively vary in your location. Try to get expert advice about the right time to convert your funds which could help to minimise the loss meaning that your money could go further.
Think About The Future
Although you’re only just thinking about buying your property, you also need to think about the future. You need to think about an event or if you needed to sell your overseas property. Have a look at the current markets, if there seems to be a surplus of houses for sale then chance are you might come across problems if you were to sell in this location in the future.
This short guide should help you make the right considerations when buying a property abroad. Do you have any other advice that should be followed? Please share it in the comments below.
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