The Key Considerations When Investing in Overseas Property

While the global real estate market might have enjoyed a period of uninterrupted growth, many large-scale investors began to sell luxury properties amid their fears of surging prices that could create a bubble. Even though this represented the higher end of the property market, there was an increasing worry at a time when the global economy was finally tending to emerge from the shadow of long-term decline.

However, that is just one aspect of the real estate market which seems to continue evolving and creating new challenges for vendors and investors alike. Whether you buy a property domestically or overseas, there are always a huge number of challenges needed to be overcome if you are to safeguard your investment, particularly if you are going to expand your portfolio into new and relatively uncharted territories. Make sure you do your research, proceed with caution, and always get independent advice.

1.  What is your reason for purchasing overseas property?

The single most important thing you need to consider before deciding to buy a property overseas is the reasons for your investment, since it will have a direct effect on everything from your budget to the types of insurance you should invest in.

For instance, if you are purchasing a home for the purpose of relocating, you will need to focus on several standard considerations like the surroundings, school catchment regions, and local amenities. If you are buying a property with a view for investment, however, you will need to execute every possibly financial decisions in line with your estimated return.

2.  What are the risks when buying property abroad?

There are clearly a high volume of risks when investing in a property. These issues can be amplified if you are purchasing property abroad.

·      Exchange rate changes. The movement of currencies on the foreign exchanges sounds like a matter for every traders and investors. Even a small change to the exchange rate can drastically influence the value of your purchase, which may make your mortgage repayments, or a property, become unaffordable overnight.

·      Tax. Each country will have its own unique body of tax laws and legislation. So make sure that you account for all of the tax you will be liable to pay, in both the US and the nation where you have the property.

·      Check the paperwork. Before signing any form of contract or agreement, make sure you have all the necessary permissions, planning consents and licenses.

·      Beware developers and the hard sell. Making an investment may cause you heavy pressure to sign up with a deposit, however, don’t succumb to it before you have a chance to think carefully as well as get independent advice.

·      Language. When purchasing property abroad, you will need to engage directly with international vendors and agents even if you don’t intend to relocate permanently. Language barriers can create miscommunication, and therefore have a negative impact on cost and delay completion of a deal. Take your time to learn relevant language with a knowledge of conveyancing is a good advice. 

3.  Get independent legal and financial advice.

Obtaining an independent valuation and guaranteeing the integrity of your property is an important and fundamental part of any real estate transaction. So, always looking for legal advice from a legal representative or a lawyer who is independent of everyone else that is involved in the deal – for example, the seller, the estate agent, the developer, and those who are recommended by them.

Seek a lawyer/advisor who is fluent in both English and the local language. Make sure he or she is experienced in property sales, or understands property law in the nation where you are purchasing plus how it can relate to non-residents

4.  If things go wrong when buying abroad

If you believe that you have been a victim of fraud while having no bank guarantee/ insurance policy, you should seek independent legal advice and take legal action through the courts if possible.