The most common form of overseas investment, other than the stock market, is the international property market. Be warned though: each country has its own specific rules and regulations, and these are challenging routes to navigate without advice.
Talk to the experts
Due to the international legal and cultural differences surrounding the purchase of land or property overseas, you must talk to an expert. If you are thinking of buying a property in Portugal you could click here and discover properties and advice about law and taxes, if you want to have this country as your chosen destination. Most countries apply different taxation laws between a house that you want to use for yourself, or one that you want to use solely as a business venture. It’s a minefield.
Look at the advertisements
This is the time to put on your serious hat. A property that is described as in ‘need of modification’ probably will, in reality, require a major refurbishment. Unless you’re prepared to partake in a serious renovation scheme, move on to the next property. If a house has been on the market for a long time ask yourself why this is the case. Currency fluctuations can muddy the waters. Check out other comparable properties in the region to try and assess the market value. Always visit the region and the property in person.
Where to start
The idea of owning an overseas property can be great in theory, but unless you have a basic understanding of the local legal situation you could have problems in the future. Many Brits dream of escaping to the sun, or getting some return on their capital investment. There are numerous English-speaking agencies that advertise properties for sale and will offer translation services, and deal with all the transaction hassle on your behalf.
It’s a mistake to think that you can manage the sale on your own. Each country has its own idiosyncrasies. For example, if you want to buy a property in Italy, the taxes can be crushing and you have to ensure that none of the neighbours has an interest in the land before you can go ahead with the purchase. Have a look at current investment trends in this article in The Daily Telegraph.
Choosing your property
Once you’ve selected your property, you should carry out some homework for yourself. Water can be a huge problem in parts of Italy, the United States and Spain. Find out if there are any local bylaws that will affect you. If you’ve selected a property that needs renovation, your property tax bracket might change. The recent recession has provoked many governments to institute new taxes that might affect your purchase and dreams of future capital growth. An article in The Guardian highlights some of these pitfalls.
Positive aspects of overseas investment
If all goes well, and you’ve signed the contract and the property is now yours, this is the time to enjoy your investment. Your local notary should have informed you about any prospective legal problems, so now all you have to do is delight in your new property.