We have always known that investing in bricks and mortar is normally the most lucrative and wisest investment you could ever make. However, with the continuing price rises in the UK many are looking abroad to buy an investment home and future nest egg. Spain has always been first choice for many, with year round sunshine and relatively cheap cost of living. Nevertheless, what do we buy and how? Here are 10 tips to consider when buying a property abroad.
- Get the help of an Estate Agent
Your first step should be shop for a good estate agent, not shop for a property. Estate agents are necessary in the UK and in most other countries; you cannot afford to be without one. Get yourself a good one, look at the websites; a good one will seem genuinely concerned about informing homebuyers, check out the testimonials. A reputable agent will help you to find the right property and take the headache out of property searches especially if you do not speak the language. However, a warning, think hard before going it alone without the help of an estate agent. In reality, buying privately will mean months of chasing people and worrying that you have not done everything you should. However, if you do buy privately, then be very careful.
- Nothing beats good legal advice
As with using an estate agent to look for the right property, make sure you have the right lawyer when making your final purchase. A good agent will recommend a local lawyer who speaks English, who knows the area and all its regulations. It is amazing how many people are willing to buy something abroad without the use of a reputable lawyer. It is something they would never dream of doing in the UK.
- Location, Location, Location
Remember the words of hotelier Conrad Hilton who, when asked what were the three keys to success, famously replied, Location, location, location. Fifty years later not only is it still true for the hotel business, but also for buying a home with resale value.
As in the UK, where you buy counts just as much as what you buy. Narrow your location choices to just a few places and think of resale value when considering a property, and will it make a good rental? Make sure necessary shops and services are located nearby and try to make sure surrounding properties are of a similar standard and size. In addition, try to get something located near the town. Remember, buying the least expensive home in the best location is better than buying a beautiful home in an undesirable location.
- Do your homework
Buying property abroad is an exciting experience; however, one of the biggest mistakes investors make when it comes to buying property in a foreign country is failing to do their homework. You cannot do too much research into an area. Spain for example, is a big place – so first settle on a region. If it is unknown to you, try to visit the area as many times as possible so you can glean more than just one impression. Looking for property online and in newspapers and magazines should always be part of your strategy as it vastly increases your chances of finding what you want. If you are looking for property online, begin by making your initial searches as broad as possible. You can always narrow your searches later. Careful local research before you commit to buying can save much heartache later.
- Stay focused
Stay within your budget and keep focused on what you originally had in mind, it is all too easy to be tempted to buy something that is not what you really want. While you want to cast your net as wide as possible so that you do not miss your dream home, you do not want to be wasting time viewing property that is wholly inappropriate or completely unaffordable.
Therefore, you should draw up a realistic and accurate wish list. However, you must go looking for your home with an open mind. You will soon realise that it is virtually impossible to find exactly what you want, so you may need to compromise on some issues, you prioritise your requirements.
- Know why you are buying
Make sure you know why you are buying and what it is that you are seeking to achieve with your purchase. Is it a holiday home, a residential home or an investment. Are you looking for short-term gain or regular long-term income? If buying for investment, it is vitally important that you understand the risk factor and you are comfortable with it.
- The bigger house is not always the better
In any residential development, houses vary in size but if you are looking for maximum resale value do not always choose the largest house on the block. When determining market value, the homes nearest to yours are most important. If most of the nearby homes are smaller than yours then they can act as a drag on appreciation. On the other hand, if you buy a small or medium house in the development, the larger homes can pull yours up in value.
Do not assume that the more bedrooms you have the better the property is. Two and three bedroom properties have the quickest sell-on value and you should try to stick with this when buying. Two bathrooms are necessary and as most will tell you, a large kitchen is the heart of the home.
- Money, money, money
Consider what you are buying, and allow for extras. The cost of buying a property abroad oftentimes involves extra costs, (VAT, lawyer’s fees, and taxes), so you must budget accordingly. Consider the pros and cons of buying abroad and always factor in costs including existing commitments and future expenses.
- Check the transport links
Make sure there is a choice of budget airlines, and if possible more than one airport. Check out the road infrastructure. People who rent property will want somewhere that is easy to get to and will often be attracted to those places with a nearby airport served by low cost airlines. Budget airlines have opened up huge areas of Europe, but do not assume they will always be there. What would happen should the airline close down the route?
- Check the taxation and inheritance laws
Make sure you understand the tax implications involved should you decide to sell. In addition, if you want control over how the property is dealt with on your death and avoid any restrictive rules, then check out the inheritance laws, it is likely that you may need two wills one for any assets in Britain and one covering your property and savings abroad.