Buying a house abroad is a dream for many, and a mere practical necessity for others! Whatever your reasons and wherever you are looking to buy, purchasing a property abroad can be complicated and there are some very serious considerations to take into account. In this post, we will take a closer look at the realities of buying a foreign property.
It is often said that buying a property is one of the most exciting and important things that we can do. However, it is less often pointed out that it can also be very stressful! Buying a house in a foreign country though, carries a whole extra set of stresses and complications that frankly are enough to put a lot of people off the idea altogether.
However, there are many compelling reasons why people sometimes find themselves buying homes abroad and we will look at a few of them now.
Owning a holiday home is a dream for many but one that is only ever realised by a lucky few. As people get older, they often find they have a favourite holiday destination or “go to” place where they like to return to every year or even multiple times per year.
For some people, it makes logical and even financial sense to buy a holiday home in their favourite destination rather than working their way through all the local hotels and guesthouses.
Sometimes buying a property abroad can be a great investment opportunity. Destinations such as the UAE and Eastern Europe have all seen real estate booms over the last decade and some property rises have more than quadrupled.
Investors and prospectors are constantly looking for the next “up and coming” destination to try and snag real estate investment opportunities. Apparently Slovenia is tipped as a great place to invest in real estate…
Some buyers are looking to buy a house abroad because they work abroad. In particular, the UAE and Gulf States host thousands of expat oil and gas workers who may be stationed for years without taking citizenship and without fully giving up their lives back home.
It makes sense for many workers to buy a house in their host country which they can then sell once they finish their job and return home.
Buying a property abroad can be a very clever way to diversify a portfolio. Holding all of one’s assets and net worth in a single country exposes us to economic downturns and house price crashes. Owning a house in a second country can therefore add a level of indemnity.
Sometimes buying a house abroad is simply a business opportunity. For example, it could be buying a house in Spain to rent out as an Airbnb or it may mean buying a house in Costa Rica to turn into a high end, eco-retreat.
Also, in some cases, people buy houses abroad to use as holiday homes and then rent out when they are not using them.
Buying a house abroad can however be fraught with complications and risks. In order to mitigate these risks, it wise to use professional services including the following;
It probably goes without saying that you should engage a lawyer before buying any property, let alone one in a foreign country. However, you need to take special care to ensure you select a reputable, trustworthy foreign lawyer who is fluent in both the local language as well as English so that they can explain things to you properly and clearly.
In some countries, it is not even technically legal for foreigners to hold property. In these cases, there are usually complex and intricate work-around solutions such as forming local companies or nominating a trusted, native citizen to appoint as a custodian. However, these strategies can carry some risks so it is important that you appoint a lawyer who fully understands these and is able to ensure that you understand them too.
Buying a house abroad means that you will have to pay over the sale money to a foreign bank account in a foreign currency. If you simply do this using a bank transfer, then you will find that the handling fees and interbank forex rates will add up to a considerable amount that you will have to pay.
Therefore it may well be worth using a money transfer specialist to handle the payment. They can offer better exchange rates and lower handling fees than the banks and may be able to help you save a few thousand bucks. There are a lot of companies out there offering money transfer services and not all of them were created equal. If you are unsure which one to use, then Moneycorp is a known and respected establishment and is well worth considering.
Whilst you should be able to trust and rely on your lawyer to handle most issues for you, it would still be wise to get all key documents translated by an independent, professional translator so that you can look them over yourself. This could include property surveys, sale particulars, transfer deeds and of course any sales contracts
Translators typically charge per document and whilst their services are not cheap, you will hopefully not need more than 5 - 10 documents translating. Either way, it is not a service that should be skipped.
Whether it’s a vacation home or a business opportunity, buying a foreign house can seem daunting at first. However, at the end of the day remember that house markets are ultimately very similar all over the world and with the right professional services to assist you, it will hopefully all work out fine.
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