OPW KEY FACTS…
WHAT YOU NEED TO KNOW BEFORE YOU BUY OVERSEAS.
Buying international property requires more time, care and research than buying in your home country. The surest way to make the transaction as smooth, safe and stress free as a normal primary house purchase is to employ the correct professionals from the very beginning. Buyers who invest time and effort in selecting appropriate overseas property experts at the start of the process usually experience fewer problems and lower overall costs later.
TAKE LEGAL ADVICE, DON’T DIY!
Always use a lawyer to represent your interests, deal with any problems that arise and complete any formalities. Forget false economies, it can be foolhardy to try to save on a lawyer’s fee by trying to do things yourself. Ideally they should have a good knowledge of the local market and also be capable of ironing out common problems, like establishing who exactly owns the property and checking through the terms of the contract.
DON’T SPEND MORE THAN YOU CAN AFFORD
This should go without saying but many people don’t heed this very simple advice. So be realistic about your budget and then stick to it. If you are borrowing to buy, obtain a provisional mortgage offer before you start looking. Consult a reputable financial specialist to help ensure you only take out a mortgage you can reasonably expect to pay back, even if the market falls unexpectedly. In your calculations remember to factor in professional fees and even if your property requires a small amount of renovation check the costs of these – they may be very different to the cost of work in the UK.
BEWARE OF CURRENCY FLUCTUATIONS
Constantly changing rates of exchange between international currencies are inevitable and even small rate changes can make a large difference to the purchase price of your property, your mortgage payments or future rental income. By speaking to a specialist currency broker such as Voltrex FX instead of a high street bank you could save thousands during the transaction, for example by securing your rate of exchange early to take advantage of favourable rates. A foreign exchange specialist will highlight the risks and advise you how to take appropriate action to avoid them. Please contact OPW for further advice.
PICK ONLY ESTABLISHED AGENTS AND DEVELOPERS
If buying a new build or off plan property, choose the developer you buy through carefully. Ask lots of questions. Initially, focus these questions on the agent or company, not the properties. Ask for client testimonials and check what is included in their service. Ask for details in writing in the form of their Terms and Conditions. At Own Property Worldwide we endeavour to be completely transparent, professional and honest and will answer any questions you may have.
QUESTION ALL PROMISES
Bear in mind the risk/return ratio. This means big returns can come from investment in overseas property but these may come with significant risks. Don’t only think of the possible profits to be made. For example, in all calculations remember that interest rates will change so your borrowing costs will alter over time. Also note buying abroad has tax implications, especially if you rent the property. You’ll want to keep tax bills to a minimum, including inheritance when you pass on your property, so the small fee for consulting a tax expert is worth it. Cyprus is an example of a safe buying location that has ZERO Inheritance Tax.
FINANCING YOUR OVERSEAS PURCHASE OR REMORTGAGE
Obtaining finance to purchase or remortgage an overseas property has become trickier in the past couple of years as lenders have tightened criteria. Rates remain competitively priced, with mortgages available from 2.75% in France and Spain. If you are buying in France, you will need a 20% deposit, although lenders will lend up to 100% loan to value (LTV) for the right type of client. In Spain, you need a 30% deposit if buying in the Balearics or 40% in mainland Spain. In Italy, lenders also require a 40% deposit while in Portugal and the US, its 25% and 30% in the Caribbean. In some instances, 100% finance is available and OPW source these projects in locations such as Portugal and Spain.
