Travel and leisure
Living abroad
Buying abroad - an interview with Liz Hodgkinson
One million British pensioners live abroad; perhaps the same number have holiday homes overseas. Property expert Liz Hodgkinson is the author of 'Buying Property Abroad.' Julian Champkin spoke to her about the pitfalls and how to avoid them
"The most important thing is to decide WHY you are buying a property abroad," says Liz. "Is it for somewhere to retire to? Or as a holiday home? Or as an investment? The answer will affect where you buy and what you buy, because no one property will serve all three purposes.
"A built-for-rental seafront apartment and a rundown rural farmhouse will give hugely different returns on investment, and need hugely different amounts of maintenance - and sheer effort to run."
For those in their fifties and sixties, buying abroad for investment - especially on borrowed money - may not be such a good idea, says Liz.
"You don't want to be looking at a 20-year mortgage when you are already in your 50s or 60s. And if you are planning to pay for it by renting it out for part of the time, there are pitfalls in that - which we shall come to.
"Then ask yourself why you have chosen your particular destination. Is it for the culture? There are people who simply fall in live with Italy, or with France, and who passionately want to be there. That is fine. Or do you just want the sun? That is fine too - especially for arthritics or asthmatics like my late partner; we found Spain was really beneficial to his health.
"The warm dry climates of the Canaries and Cyprus are similarly good. But even if it is a holiday home rather than full-time retirement in the sun that you are after, ask yourself how you will pass the time while you are there.
"Will you be content just to soak up the sun and do crosswords? Then Spain, or Cyprus, which has a English feel about it, or even Florida where of course they speak English, may be ideal for you.
"Or will you want to engage fully in the local community? In which case you really will have to learn the local language - so well that you 'inhabit' the language, as a friend of mine put it. She was already bilingual in German and English but took early retirement to France; and even though she was a language teacher herself she had to put a huge effort into it. You’ll have to read books in French, newspapers in French, watch TV in French, or you'll flounder. Schoolboy French will not be enough.
"If you are buying as a couple, make sure that you and your partner both want the same thing. Many a couple have bought into golfing estates in Portugal, only to find that he is perfectly happy on the links all day, while she is bored rigid in the apartment.
"Beware of travel times and costs, and look to the future. If it is a five-hour flight away, that does not mean five hours door to door; it is more likely to be ten hours by the time airport check-ins and security and travel at each end are included.
You may think that is OK now; but how will you feel about it in a few years' time, when you are in your 70s or 80s? And just because low-cost airlines fly there does not mean that low-cost tickets will always be available.
"I have just returned from Slovenia," says Liz. "One of our party paid £90 for his ticket; another, on the same flight, had to pay £250. Which is why many prefer to be somewhere they can drive to - and you can carry much more in the way of furniture in the back of a car than in the hold of a plane." Practical drivability effectively means France or Ireland or northern Spain.
Finally, three big warnings. Legal title to your property can be a minefield - especially in the old eastern block countries like Poland and Bulgaria.
"It may all seem perfectly legal, but in the Communist era the property may have been confiscated from a family whose descendants may now claim it - and who may have documents to prove their claim. This can apply to the land a new house is built on as well as to the building itself."
The second is about 'Fly-and-buy' trips. "Some agents organise tours for potential buyers; a friend of mine went on one of these to Poland and ended up buying not one house but two. 'It was a feeding frenzy,' she said. The sales pitch on these trips can rival the worst of the days of selling time-share apartments."
And Liz has a big word of warning about rental. "Many buy hoping to use it for holidays for themselves, and to rent out for the rest of the time. But rentals will be highest in the holiday season when you want the place for yourself; you will need a local agent to organise the lets - you cannot change sheets and the like at a distance of 600 miles - and the agent will want his or her cut.
"Reckon that at least 50% of rent will go in fees. Some also will not take on a property unless they can rent it out throughout the holiday season - which can lead to the bizarre situation of your having to pay the agent to holiday in your own house.
"Do a dry run, and rent two or three times in the area where you are planning to buy. You may be surprised how cheap it is - which should warn you how little you can expect to get if you in future rent out a property you have bought."
But for all the scare stories, she says, many have wonderful holidays and retirements in homes they have bought abroad.
"Do your research, as thoroughly as you can. Then, if you do decide to go ahead, you stand a good chance of having times that are as enjoyable as they are exciting."
* The Complete Guide to Buying Property Abroad, by Liz Hodgkinson is published by Kogan Page - www.kogan-page.co.uk - paperback, 316 pages, £12.99.
