Read These Guidelines Before Buying Overseas Property

We read an article yesterday about a single-mum who managed to save $65,000 in two-years and she didn’t use any of her salary. She did it through investing and saving and making her money work for her. That’s the dream right there. To have a passive income that blows your mind every time you check your bank account.

The problem is, understanding how investments work is one of the most overly complicated things on this planet. It’s like understanding the big bang theory, how vast the universe is or what goes on in Cardi B’s brain. It’s complicated. But it doesn’t have to be.

No. We’re not going to explain how stocks and shares work, or how to find the best share opportunities or what all those weird financial terms mean. Instead, we’re going to talk about investing in good old brick and mortar, but not locally. We’re talking about investing in property overseas.

That’s the dream, right. Owning a place in the sun. It’s just that, well, it’s a dream that is often speckled with images of a nightmare because we’ve all seen images of some soon-to-retire couple stood beside some half-built home looking forlorn because the development ran out of money before it even began, their dream having gone up in a pile of debt. It’s enough to put anyone off going down this route.

But investing abroad doesn’t have to look like the opening credits of some cheap TV documentary in that is doesn’t have to spell disaster. It just requires following a few basic steps, which we have laid out for your perusal below. Now go grab yourself a holiday investment that you’ll love.

1. Keep Your Bravery In Check

Everyone wants to enjoy the kind of early retirement you get from hitting it big time with an up and coming market. You know the kind, where property is cheaper than a 1-litre bottle of Pepsi and there are (real estate agent spun) rumours about it being the next St Tropez, Malibu, Gold Coast or Hong Kong. It’s tempting. But it’s also way safer to just go for an already established market. If you’ve already got a portfolio of investments under your belt then maybe you can live a little, but if you are trying to find your first real estate investment then don’t roll the dice. This isn’t just for your sake, it’s because you’ll find it easier to get a lender on your side. The trick to keep your better judgement in tact is knowing what you want to get out of your investment. If it’s a cocktail of optimism and romanticism, you might want to reconsider your reasons.

2. Make Sure You Own It

There are some pretty weird local rules that can mean you don’t actually own the property you bought outright, which can feel like an outrage. What you want is some form of Deed of Sale and Purchase of Land that will help you avoid any fraudulence. Every country-slash-region will have their own variation of this, but to help you understand what you are looking at, this one for Indonesia (an “up and comer”) is well worth a read In the UK, you really want to avoid buying a leasehold unless it is for 999 years or something, while France and Spain have little legislations that can see the state claim your property. Basically, pay attention to the fine print and make sure nothing can stop you from owning your home.

3. Taxes Are a Major Factor

If you remember anything from this article, anything at all, make sure it is this: every country has different taxation rules. The reason we’re telling you this is such a blunt-force kind of way is so that you make a concerted effort to get to grips with them before you consider putting in an offer. Think of it as a sort of Stamp Duty or VAT or whatever the country’s equivalent may be. But that’s not all. Most people that buy properties abroad, do so with the intention of renting them out until the time comes for them to retire, and that can come with a whole bunch of other taxes to shoulder. Our advice: speak to a tax advisor and ask them what the rules on overseas property investments and rental income are.

4. Is Renting Legally Allowed?

It’s a foolish question to ask. After all, it’s your property and so it is your prerogative to rent out when you’re not using it, right? Well, actually, that’s wrong. Yeah. Each country has their own strict-slash-relaxed rules on renting out properties, which is why you need to ask the question clearly before you put your squiggle on the dotted line of each page. Don’t just look at federal laws either; look at the local laws in the area you’re thinking chop and change more than celebrity baby names. Of course, not everyone knows what the purpose of their investment is when they buy. It’s totally common. If this fits your situation, you may want to have it as a must-have to avoid disappointment in the future.

5. Exchange Rates Will Catch You Out

Of course, you already knew this, which is why you factored in timing and location in order to snap up the friendliest exchange rate you possibly could. But none of this will matter if you don’t find yourself an amazing currency specialist that knows which is the best way to transfer payments. By doing this, you can be sure you get the best possible rate and lose the least amount in fees. Basically, knowing the exchange rate is a good start but knowing how to turn it into a reality requires something else entirely.

6. Writing Is The Only Rule

Phone calls are without a doubt the most effective way of getting a deal done. But there is a lot of risks attached to this, and none more so than losing certain details. That’s why we urge you to keep a record of all correspondence in writing and, should you do anything over the phone, draw up some minutes, pop the date and time at the top and send it over to the other party to check. It will save you a massive headache.

2020 Kimberly Signature

Visits: 95

Be the first to comment

♥ Be respectful when leaving comments ♥