Property expert Martin Roberts takes another look at buying abroad
As the British weather consistently fails us, you may be reconsidering the overseas property purchase you have been talking about buying for years. It’s been a rough ride in recent times, so here are some pointers that may help you make the right choice...
Research and action: It is a still a great time for the savvy investor to be buying overseas, so make sure you are clear in your mind as to whether you are buying to rent ‘for income’ or to use ‘for holidays’. Do a couple of recce trips - know that local town halls and bars are great sources of information if you have a smattering of the language and want to research the local area. Most locals, particularly in rural areas, will know what is for sale.
Location, Location, Location: Do your homework. Too many Brits leave their brain on the plane and are lured into purchases in far flung destinations that may prove costly – consider a short list of destinations and when you visit research thoroughly and investigate all options. Remember local opening times as these may be different to UK office hours.
The Law: Most overseas legal systems differ from UK law. A survey is not compulsory overseas but it’s sensible to get one from a British surveyor (if possible) who is registered and insured. Engage a specialist, impartial lawyer- such as one from The International Property Law Centre (www.internationalpropertylaw.com) with expertise, who explains the law to you in detail (eg in the case of Spanish property, who ensures you understand the Licencia de Primera Ocupacion). You should also be fully aware of the implications of making an offer, what happens when an offer is accepted and handing over a deposit.
Culture: You are entering into a different culture so respect how other countries conduct business transactions. Often, countries that appear to be the most laid back to the tourist's eye are the most formal, paper-rich and bureaucratic when it comes to legalities. Make an effort with the language – you will be amazed at how differently you are treated.
Lawyers/Notaries: The role of a Notary is impartial as a civil servant and his or her services are engaged by lawyers. Ensure your lawyer is independent of the property in question; that they speak fluent English as well as mother tongue; communicate to you in writing and get signatures from multiple sellers (eg in the case of many children selling a family home).
Currency fluctuations: Protect yourself against changes in exchange rates by ‘forward buying’ your foreign currency, so you know exactly what your regular outgoings (mortgage etc) will cost. You can do this though a specialist currency broker, such as www.purefx.co.uk
Inheritance/Your Estate: Your overseas property may fall under the parameters of your own UK Will but you might need to make a separate Will in the purchase country (in both languages ideally). Failure to do so will mean that your family falls prey to local laws and Inheritance Tax.
Outgoings: It is easier to manage finances from a bank in local currency. All of your local ‘council tax’ and utility bills, including telephone/internet lines, should be paid locally. Regular overseas money transfers from the UK can cost as little as £4 a month. However, all your income and expenses will need to go on you UK tax return.
Market yourself properly: If you plan to rent out your overseas property, plan a simple marketing campaign to get your property noticed. There are internet sites, such as www.holidaylettings.co.uk that will help you find renters and manage the bookings. You will need someone local to manage and clean the property as well as meet guests.
Work out flight costs: Do airlines fly all the year round (including low-cost providers) or is a new or extended airport in the pipeline? Asking the right questions before you buy may affect longer term affordability, accessibility and (rental) appeal.
So…instead of dreaming about your overseas property purchase, go online and start doing your homework…
For more information on this topic and property matters visit www.martinroberts.co.uk