Making the decision to buy property overseas is an exciting move that requires careful thought beforehand. With more and more people looking to invest their money in international real estate or simply buying a holiday home to use, it is important to be aware of all the risks. If you are thinking of buying overseas property for personal use or even for business expansion, then make sure to get all the knowledge you can first.
What risks are involved with buying international real estate?
As with any serious transaction involving large amounts of money, sometimes you may have to deal with issues or challenges along the way. If you consider how much work it takes to buy in the UK, it is common sense to understand that adding a foreign country into the mix can throw up fresh problems at times.
Here are a few key points to be aware of:
- Property law within the foreign country – one risk involved with buying overseas is that the law around the purchase in the foreign country may be different from in the UK. Don’t make the mistake of not checking this out properly and ending up with a nasty surprise or extra financial costs that you weren’t expecting. The best advice is to employ a lawyer in the foreign country who is fluent in English and the native language as well as knowing their laws inside out.
- Have your money ready – one key mistake to avoid is not having your financial capital ready to go in the foreign country and currency when needed. This could lead to costly delays or even the sale collapsing altogether. You need to find a way to transfer funds internationally – whether it’s a money transfer from the UK to the USA or another country combination.
- Research your new market carefully – many UK homeowners overseas were hit hard by the collapse of the Spanish property market a few years back. Indeed, the Spanish market had slumped so badly by 2012 that property values were 70% lower than normal. This highlights why researching the market in the new country is key before buying. Make sure that it looks set to have a stable future so that you will not be caught out in the same way when trying to sell in the future.
- Keep an eye on those exchange rates – another financial concern to be aware of is the strength of the local currency that you are buying into and how it may fare against the pound in the future. Naturally, if you buy property in an area that is weak against the pound, then any rent or sales figures will not look so impressive when exchanged back into your British bank account.
Buying overseas is simple with the correct approach
Although there are the above factors to consider, it should not scare people off buying abroad. As long as you do your research and buy into strong markets with a buoyant currency, you should be fine. For extra security, you could look at countries where the housing market usually performs strongly. Finding the perfect property overseas will be a breeze once you take the time to focus on the essential points.