Investing in Property Abroad
Imagine owning your very own villa, apartment or condo just minutes from a beautiful sandy beach and in the heart of the action of a busy tourist resort. A property, perhaps more specifically a buy to let holiday home, which not only brings you additional income, but that you can also visit and use yourself whenever vacant. You’d certainly be the envy of friends and family.
Buying property overseas is no new thing, people have been investing in property abroad for years. This has become significantly easier over the years particularly since the introduction and global development of the worldwide web in the 1990’s; and with international airports growing, and more airlines flying more frequently to more destinations than ever allowing people to travel the globe with minimal fuss. However, despite the very attractive benefits and the obvious appeal, investing in property abroad is not without its pitfalls and there are many things to consider. Below we have identified the advantages and potential benefits of such an investment, and have highlighted some key issues that every investor ought to consider prior to investing their capital.
Why Invest in Property Abroad?
- You’d be the envy of friends and family. Great conversational piece, as not many people will be able to say they own a buy to let holiday home abroad.
- Free accommodation abroad in a location you know and enjoy. Your very own retreat which you can use free of charge when holidaying subject to the property being vacant and not let out.
- An asset that can be passed onto your children or family for them to enjoy in years to come.
- Additional revenue stream and positive cash flow. Could potentially produce much better returns on investment than in your home country.
- Escape political and economic instability and turmoil in your home country. Investing abroad in a politically and economically stable country would translate into security of investment and stable returns.
- Could prove to be a retirement home in the future.
- Some investments provide opportunities for citizenship or investor visas. This depends on the investment itself and the amount of capital invested.
Things to Consider When Investing in Property Abroad
- The most obvious one is that you will physically be unable to manage the property yourself and therefore would have to entrust the management of the property to a local agent, unless you have friends or family in the country of investment who can assist.
- You may need to travel at short notice to see to any urgent issues that require personal attention. This is something you must be prepared to do in a worst case scenario.
- The language barrier. Although most property professionals around the world will speak English. Nonetheless it is important that you are able to communicate with the people managing your property.
- Laws and governance will most likely be different. You will need to study the local laws and regulations of the country within which you’re planning to invest to avoid any complications further down the line.
- There is an element of risk with every investment. Purchasing a property abroad is subject to the same risks as purchasing a property in your home country. Markets can rise and fall. We would advise researching the market, and if buying off plan then perform your necessary due diligence to ensure you are buying from a recognised developer with a good reputation and a strong demonstrable track record.
- Exit strategies could potentially be more challenging. Selling a property abroad in a market you do not understand or have experience in could be significantly harder than selling a property in your home country, which could leave your money tied up longer than you intended. It is extremely important you research the local market and seek advice from local professionals.
- You would end up with financial commitments in your home country and abroad. This could potentially prove difficult to manage if you are unprepared.
If you are interested in investing in property abroad, please take a look at the range of opportunities that we have available on our overseas property investment page and feel free to contact us for help or advice.