Tips for buying overseas propertyfjpinvestment
We are seeing a strong recovery in the UK property market since the turn of the pandemic, but many are sceptical over whether this current rate of growth can be sustained. Some investors are therefore looking at buying overseas property in search of greater or more sustainable returns.
To coincide with this, professionals are increasingly moving overseas whilst working for the same employer. With increasing opportunities for remote work, people are taking this opportunity to live in a new country with the security of work behind them.
Concerns are emerging however when it comes to the purchase of overseas property, most notably buyers not taking the proper precautions and relevant checks when agreeing on property and signing the contract.
Financial planning and property taxes are just one area to consider when purchasing property overseas. In Europe for example, there are several jurisdictions that you need to further consider when purchasing. Below, we share some of the top tips you should do or look out for when purchasing property overseas.
Legal advice is essential
You should always seek out independent legal advice for the entire process of purchasing property overseas.
This should be applied throughout the entire sales process, from the developer, to the seller, to the estate agent. You should employ a lawyer that is familiar with the legalities (and potential setbacks) from the country you intend to purchase from, as well as the bilingual in English and the local language.
The ability to converse and properly review the contract in both languages will be an important part of any sale.
Translate any contracts
On the topic of language, getting a professional, independent translation of any contract relating to the purchase of the property is highly advised.
Whilst it is common to have the contract in both languages, there is no guarantee that the details are the same. In fact, often the contract is legally binding on the side of the native language, this means that important details can be listed in the language you are unfamiliar with, subsequently important information can be missing or added without your knowledge.
Having contracts impartially translated will ensure that you are 100 percent certain of the details contained within the contract(s) you are signing.
You must ask critical questions about the property. Focussing your questions about the area of the property is always advised.
For example, ascertaining whether the property was built on an area that is agricultural land (or similar) will increase the risk of obstacles down the line. Again, making sure you take advice from a lawyer that can properly investigate this will be necessary.
When purchasing property overseas, you also must ensure you have the correct permits on the property. Often buildings were made with the wrong permits, sometimes as a result of corruption, and in extreme cases, no permit at all.
Some countries allow property to carry debt, meaning when the property is transferred in ownership, so too is the debt. Again, in exceptional cases the debt can be greater than the value of the property, causing you immense financial pressure.
Get your own valuation/survey
Before purchasing, make sure to get an independent survey and valuation on the property.
Poor construction can be a problem anywhere in the world. Getting a professional survey done on the property will give you a clear understanding of any structural defects, however minor, and will give you an accurate valuation for the property, giving you a clear understanding of how much you should be paying.
Being aware of any problems with the property that may surface down the line is important, preventing financial difficulties and even heartbreak down the line.
An independent survey and valuation should be sought regardless of the age of the property, with a growing number of cases drawing attention to structural defects in new-build properties.
Pre-approve your finances
Always be sure to get your finances approved before signing the contract. If you are applying for a mortgage, make sure the property contract is signed subject to finance, with this clearly stated within the contract.
Doing this will help you recover the initial deposit on the chance you are turned down for the mortgage. Hopefully you will have a good idea of approval before reaching the signing stage though.
Moving abroad is certainly daunting for many, with financing a property overseas never an easy task, especially now considering the current climate. Renting is a good option to test the waters and get a feel for the area you plan to move to, this will also give you time to fully understand the requirements to purchasing overseas, particularly if you are getting an overseas mortgage.
If you are adamant of a purchase overseas, be sure to follow the above tips and exercise caution when making your purchase, the current climate could present a good opportunity to move overseas.