Overseas Property Developments – a worldwide choice?

Budget airfares, the worldwide access to property details via the Internet more disposable income and availability of foreign mortgages have all contributed to the explosion in foreign ownership of overseas property and real estate developments.

So where in the world do you choose? From Portugal to New Zealand. From Estonia to Brazil – there are emerging markets everywhere. In the last few years Spain had been the traditional favourite – but there has been such a down-turn in the market that some major developers have gone bust in Spain. Bulgaria was touted as the next great property market – but here too the market has shrunk and sales have slowed. Then came Cape Verde, Turkey and tomorrow…perhaps Australia – well your guess is as good as mine!

The lesson is research thoroughly,  and make sure you understand the potential of the country (and are aware of any local difficulties). Below we look at some issues you might want to investigate before committing…..

Buying Overseas Property

The choice of countries continues to explode – new countries are added to the list on almost a daily basis. There are expos, property fairs, seminars, 1000s of property websites, and glossy magazines all promoting new developments. In fact, there seems to be too much choice.

Overseas Property Investments

What type of buyer are you? Investor, holiday home or re-locating? Unfortunately too many potential purchasers often want to combine investing with a holiday home. It can be a tricky balance – but there are products out there that can fufill that role (namely, leasebacks and buy-to-lets with guaranteed rentals but also with personal occupancy as well). However, if your long-term aim is to retire to your “investment”, then living on a holiday complex may not be your cup of tea (most leasebacks / buy-to-lets are on holiday complexes).  A general tip for choosing an investment property: historically, capital cities of countries joining the EU having seen significant investment, new jobs, increased demand for housing and LARGE increases in property values! There is a new wave of countries joining the EU so investigate those countries!

Before committing: Get expert help on the legal side – make sure you take advice on contracts. Do you need finance? In some countries the mortgage rates can be significantly higher than your home country. Checkout the tax laws – many countries have capital gains tax when you sell. What are the local tax laws on rental income? Who is responsible for maintenance (what are the costs?).

Residential Overseas Property

Perhaps you are considering moving overseas for employment, moving closer to family or looking for a life-style change. If you are not retiring – make sure you check out the jobs market – it can be very difficult for a foreigner to get a job even in the EU. Not all European countries are members of the EU – check that foreigners can buy property, in some cases you need to form a company and buy it through the newly formed company. Make sure you are familar with local planning laws – Spain is a good example where “land grab” can be potential issue. Consider Health, Education, Bureauracy, Local taxes, Cost of Living, the language barriers, transport links, weather, lifestyle and location, location, location. If all goes pear-shaped: what is your exit strategy? Will you be able to afford moving back to your ex-patriate country?

Internet Choice

The information highway (internet) can answer most of these questions – so search and research thoroughly and narrow down your choices – be an informed buyer and look for companies with good international reputation and advice with a wide range of properties and real estate developments to help you.

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