Overseas Property Buying

Overseas Property
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Investing in overseas property can offer significant benefits, but investors need to be aware of various risks. We will go over all these points in-depth in this post!

Why Invest in Overseas Properties?

There are plenty of reasons why people invest in overseas properties at some point in their life. These overseas properties can be used as holiday homes or retirement homes. Investing in such properties gives great investment benefits. You can even rent out these properties for a healthy extra income. There are several countries such as France, Italy or Spain where you can buy an old villa or cottage with a sprawling garden in a serene village for low prices.

From deciding where to buy and finding the right house to financing your purchase and budgeting for the costs involved, here’s what you need to know.

Deciding where to buy your holiday home

Generally, people choose some common locations such as UK, Spain, France, Portugal but Greece, Italy, Cyprus, Turkey, Bulgaria and Barbados are among the other popular destinations. Usually, people choose to buy property in a country where they love to spend most of their time and connections there through friends, family, or work. But if you are an investor then want to make some money when you sell up in the future, it’s worth looking at your possible destinations in the housing markets.

Overseas house prices

According to reports, it has been noted that overall price growth is slowing down. It is expected to continue in 2021 as economic instability, the Covid-19 pandemic, tighter regulation of the economy, and debt costs are expected to grow worldwide.

In Spain, annual house prices rose by 3.9 percent from the end of 2017 to the end of 2018, while costs in France increased by 3.3 percent. In Portugal, prices rose by 6.1 percent, slightly more. Slovenia (15.1 percent), Malta (11.8 percent), and Hungary (10.4 percent) were the countries in Europe with the highest rises, while prices dropped by 0.8 percent in Italy, another commonplace among Britons.

In the United States, house prices grew by 4.7 percent. Still, growth is likely to vary dramatically across regions, as with any country, so check with local real estate agents in the particular area you are thinking of buying in. Schofields Insurance, a holiday insurance firm, noticed last year that Florida is the best place to buy for a good return on investment (ROI).

When you select an area, how you intend to use your property should also be a factor. Does it have tourist attractions such as restaurants, stores, and leisure facilities within easy reach if you intend to leave it to holidaymakers while you’re not there? And if you want to retire there, are you going to be close to the hospitals and other health services? How you will be maintaining the property, its maintenance cost, etc., are other essential factors that need to be considered.

Your rights in the EU and elsewhere

It is essential to verify whether non-residents of the country you choose to buy in are permitted to own and rent the property there or any restrictions. New Zealand barred foreign buyers from buying homes a few years back.

In many EU countries, Brits currently have the same rights as residents to buy and own property.

You need to make sure you have the right to move and stay if you intend to move to your overseas property or spend extended periods there permanently. If the destination is situated in the EEA (European Economic Area-EU plus Iceland, Norway, and Liechtenstein) or Switzerland, you can freely reside due to freedom of travel.

Finding a house abroad

Property websites like Rightmove, Zoopla, and PrimeLocation all advertise overseas homes for sale by estate agents worldwide. On the websites of global estate agents, such as Knight Frank and Savills, you can find higher-end properties for purchase.

If you choose a destination to buy a property, it is mandatory to visit that place to know more about it; it is good to research both through the internet and by talking to local people. If you are judging any property by just spending a few days there and now you think you know a country or region well, you must remember that living in a place can be very different from soaking up the sun for a week or so.

Just check the area how it is in summers, how in winters and other seasons. You may find it crowded in one season, but you may find all the shops are closed in another season. It is a seasonal place then it might not be much fun to stay in and could be harder to rent out.

Carrying out checks on the property

If you have ever purchased a property in your country, then you should perform all the same checks in another country as well where you are going to buy your overseas asset. Make sure that the property is worth the price and structurally sound.

If you take out a mortgage, the lender will generally perform a valuation survey to ensure that the property is suitable for the loan. Still, you can also conduct your independent survey to give you a more accurate image of the property’s condition.

And if you are going to buy new construction, they also make a proper inspection of the property. Ensure it does not have structural flaws or other problems. Some disreputable developers have been known to use poor-quality construction materials to cut costs or create shallow foundations that can cause chaos in the long term.

Legal advice

Hire an independent property lawyer to work for you who is knowledgeable in the legal process of the country you are buying in and speaks both English and the local language. He or she should have no relation with the estate agent, developer, or property seller.

(Note:- When buying property abroad, you may need the local currency of that country. Always check the currency conversion rate and only convert it from the place that gives you the best price.  At INRXRATE, you can know the exact currency conversion rate.)

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