Buying overseas property can provide a wealth of benefits unattainable in the UK market. These benefits can be simple, such as acquiring an international property that fits your retirement plans. They can also be more complex.
Investment in up-and-coming international communities can yield high return rates. You may also be looking to purchase more affordable property than the UK offers or seek out lower mortgage fees.
Whatever the reason behind purchasing property abroad, the process is undeniably more complicated than buying domestically. Yet, that needn’t put you off. Buying property abroad can be simplified when the process is carefully considered.
Understanding Motive Is Key
Clear motivations must be considered first and foremost. Individual countries will have unique benefits and drawbacks of property acquisition, just as the UK does. You are unlikely to find a nation that ticks every box without a trade-off — if it’s too good to be true, it probably is.
However, identifying exactly what you want to get out of your overseas property allows you to find the best location for developing your portfolio.
The USA offers great opportunities for property investment for example. Maintenance, tax and costs per square foot are low, not to mention it is an attractive nation with no language or cultural barriers and travel from the UK is fast and easy. Yet, the yield is also low. Therefore, it’s a strong candidate for building a large portfolio on a lower price band or acquiring retirement property, but it’s not great for high profitability.
However, if profit is your primary concern, then you will find other countries that lack the attractive nature of the USA but provide much higher rates of return.
Get on the Right Side of the Law
The legality of buying property abroad isn’t as much of an issue as you might think. Even countries like Australia, who have incredibly strict immigration laws, will allow for most British citizens living in the UK to buy property. However, all countries have different legal restrictions you have to follow. Some don’t allow for you to own agricultural land while others levy extra taxes and other costs. You may also find you need special permits.
It is vital you know exactly what is expected of you when buying property abroad, such as what your rights are and where things differentiate from domestic purchases. They best way to do this is to deal directly with government ministries, getting all relevant information, along with going through independent advice services. This will increase the time it takes to acquire property, but it will ensure you are aware of all the obligations and legal requirements of owning property overseas.
Buy from the Right Seller
When buying international property, it is tempting to buy from commercial developers. The benefits are clear: easy, international communication and a business set up to deal with customers like you. However, there are drawbacks.
A good looking property development is no guarantee of quality or even sale. Not to mention developers are notoriously pushy on sales and some projects are never even finished. It might be the more difficult option, but buying privately through estate agents, as you would in the UK, is likely your best bet.
While it might come with some cultural and language barriers, the trade off, being able to purchase property in an established location where you can get genuine feedback from residents and proper market valuations, is worth the extra hassle.
You can also find UK based estate agents that deal in international property. Choices are often more limited, but they do exist.
Don’t Forget the Normal Procedures
Buying property abroad is an unusual situation, and it can be all too easy to focus on the new elements of acquisition. Never forget to follow the normal procedure for purchasing property while scouting abroad. Ensure you have surveys carried out, pour over contracts carefully, haggle on price, etc.
It’s recommended you create a checklist of everything you would normally look out for and do when buying property domestically and apply it to your international purchase. The simple excitement and intrigue of moving into a new type of property ownership is enough to throw even experts off their game.
Working with Local Experts Can Relieve a Lot of Headaches
Online research and trips to your chosen nation/location of property of acquisition can only teach you so much. While it can be tempting to keep costs down and to go it alone, especially if you are very experienced in the world of buy-to-let, local experts can help avoid nasty problems and provide valuable insight.
Their local knowledge can help you learn more about why you should or shouldn’t purchase a property in a particular location, potentially saving you from massive problems in the future. They can also assist in navigating language and cultural barriers in the property purchasing process and ensure you fully understand and are aware of what is on your purchase contract, even if it’s in another language.
Article Courtesy of Heather Darby of London relocation company Momentous Relocation. The team at Momentous Relocation are experts in acquiring international property, regularly helping their clients find the perfect home and dealing with all the complicated administrative work that comes with it.