Whether you have your eye on a condo in the US or a farmhouse in France, there’s something out there for everyone. Buying your dream home overseas is a once-in-a-lifetime opportunity but also a big responsibility if you’re spending your life savings. Having made the decision to seize the day and go for it, you would be forgiven if your mind wanders to white sandy beaches and crystal clear waters. Park such thoughts for now, however, this is the time to focus and be practical! To ensure your move is a success, consider these five factors:
Do you prefer “unspoilt” or a good infrastructure?
For some, when they tarmac the roads to the beach, that’s the time to sell up! For others, the growth in property values that comes with mass tourism and heavy infrastructure spending makes a desirable location.
Tourism is big business, so there are plenty of resorts and cities that are throwing money at improving the local area to sustain its appeal. A prime example of this is the Algarve in Portugal, which has benefited from important infrastructure investments, particularly improvements to the highway network and airport.
Dual seasonality can double rentals
When you’re back home and your foreign bolt hole is empty, you might consider renting it out to help cover the bills. It’s not simply a case of “buy it and they will come”, you need to be proactive. Choose a destination with dual seasonality – usable in summer and winter, for example – and its investment potential shoots up. A great example of this is the ski resort of Chamonix, which thanks to an ongoing multi-million euro investment plan attracts as many tourists in the summer months as it does in the winter.
Consider your property’s resale prospects
Calculating how much your overseas home might be worth in 10 years probably isn’t top of your to-do list. After all you haven’t even got the keys yet. But taking some time to consider its resale potential could result in you making a tidy sum when the time comes to sell up. Factors such as location, location, location, access to an airport and amenities, and investment into the area will all pay out when you come to sell.
Take advantage of low interest rates
Since the financial crisis, we have become used to living in a world of low interest rates – making borrowing money far cheaper. A prime example of these favourable conditions for overseas property buyers can be found in the Eurozone, where rates are set at historically low levels. This enables the financially savvy among us to lock in low mortgage rates that could swell our budget. You may be able to afford an extra bedroom or even a pool as a result.
Use a currency specialist
An overseas mortgage and other regular payments you will have to make – from maintenance costs to repatriating rental income – will expose you to currency market volatility. By seeking the assistance of a currency specialist, you can prevent exchange rate fluctuations from having a negative impact on your plans.