Times have changed and investing in property abroad is now a standard addition to anyone’s real estate portfolio. While our parents thought holidaying abroad was a treat, owning a home in another country is the new norm.
Proof of this is seen in fast-track citizenship programs offered by various countries, where in return for investing in real estate, you get the same privileges and rights as a citizen. However, despite the hype, careful navigation and knowledge are essential.
Remember as an investment, your main aim is capital appreciation potential and if you are looking at a buy-to-let, the rental yield. So, let’s look at some generic advice that applies to buying overseas real estate no matter which country you choose.
Flipping houses is all the rage and while some people make a profit, now is not the time to find out if you can. Your priorities should be brushing up on current real estate market trends and pinpointing neighbourhoods with long-term potential.
Also, consider your current finances especially if you are buying property with a mortgage. Some countries like Turkey, offer mortgages to foreigners investing in real estate, but interest rates are higher than the UK and can eat into appreciation potential.
If funds are already in place, use a FX company to ensure you get the best rates when converting your money to the currency of the market you are buying in.
For rental yields, you need to buy in tourist hotspots. Once you have pinpointed a potential district, find out how long the tourism season runs for, asses current competition by researching sites like Airbnb, and set up an action plan to market and manage the property, and pay taxes.
If you struggle with time or means to do this, consider leaseback apartments. For example, France’s government approved leaseback scheme takes care of maintenance, paying taxes, marketing and also includes a 20% VAT rebate. If this is an avenue you want to explore, contact us to receive a portfolio of potential properties via email.
Every country’s real estate laws, tax regulations and buying processes are different. In Turkey, lawyers are not a legal requirement, while in other countries, they are, but their responsibilities differ from the UK. No matter where you buy, use an independent lawyer and clarify their legal obligations before taking on their services. If you have to sign any paperwork in a foreign language such as the registration of title deeds, use an official translator.
If you know which country you want to buy in, email us for a buyers guide which lists the buying process, tax implications, expected timelines, legal laws and much more. Our sales representatives, can also tell you more about current trends and which countries are showing the most potential. Otherwise, for regular updates, news and advice about investing in property abroad, follow us on Facebook or sign up for our monthly newsletter.