Tips for Safely Buying Property Overseas

In these tough economic times, many people are trying to hedge their bets by buying property overseas. If done properly and after sufficient and adequate research this is a good strategy to maximize returns form real estate investments. Also, if you live abroad because of your work commitments, it makes sense to invest in real estate in the country of your residence.

How to Buy Property Abroad Safely

When choosing to invest in property overseas, please do keep the following points in mind.

  1. First check if you are legally allowed to purchase property in the country of your choice. Many countries impose limits on the kind of ownership that foreigners can have of their land and property. Some kinds of property may be specifically excluded from foreign ownership.
  2. Do not sign any legal document that you do not understand. Be wary of documents in a foreign language. It is best to sign a document that has been translated so that you understand exactly what you are getting into.
  3. Check with local lawyers and architects to ensure that the legal deeds and records are in compliance with local laws. Each country, and sometimes district, has its own laws regarding property. It is best to check these out before you buy the property.
  4. If you are planning to borrow to purchase the property, say so in the contract. Include an `opt out clause’ that lets you off if the loan is not obtained or sanctioned.
  5. Ask that you will repay the loan in the currency that you earn. This will save you a lot of conversion hassles in the long term. The only exemption to this rule is if you are planning to repay the loan out of the rental income from the property.
  6. Find out what the government fees and other payments that you will have to make are. These are normally a percentage of the cost of the property. Make sure that you factor in these costs when you are deciding if a purchase is viable.
  7. Open a bank account in the country where you are planning to buy property and get the necessary clearances for importing the money from your country. Find out what if any fees are applicable for this transfer of funds.
  8. Once you purchase the property ensure that you pay all bills and taxes on time. Some countries seize the property if you fail to do so. For this it is best to set up standing instructions with a local bank to ensure that you pay your taxes on time.
  9. Before you purchase the property check and double check all the incidental expenses to the purchase of the property. These can be quite high in some countries.
  10. Get an independent valuation of the property done for you. This will ensure that you pay local not inflated foreigner prices for the property you are planning to buy.

By keeping these points in mind you should be able to safely and profitably invest in property overseas. It is best to get an independent lawyer and an independent valuation done of the property. Before you proceed ask the local lawyer to brief you on all the open and hidden costs of the transaction. To avoid currency fluctuations sending your payment schedule haywire it is better to repay loans in the currency in which you earn. Check if this will attract a different interest rate and see if the numbers still add up. Above all keep your eyes and ears wide open when transacting in a different country, especially if you do not know the local language fluently.

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