Property Investment Abroad - Emerging Real Estate

Property Investment Abroad

Buying investment property abroad is becoming increasingly popular. This is not only because of the warmer climate but because of the affordable prices on investment opportunities available.

Making an investment in property abroad is becoming more attractive as the internal economy and stocks and shares in Britain are not providing the return they once did and the future of pension funds is becoming more uncertain. People are increasingly looking to property investment abroad as a means of providing a stable income and economic return as well as a place for holidays and possible retirement.

Spain has traditionally been the favourite location for property investment abroad but with the expansion of the EU alongside the expansion of budget airline networks into new countries such as Bulgaria are attracting property investment abroad.

Property investment abroad is now not only for the rich and famous but are being brought by the ordinary person on the street. An increasing amount of people are realising that investment in property abroad can provide not only great holidays in the sun but a steady income and security too.

Choosing the right Location

The first issue to consider when buying a property investment abroad which country to invest in and what type of property is desired. Many people find a property to invest in whilst they are aborad visiting the country.

Before taking an investment in a property abroad you need to consider the following:

• Where do you want your property abraod to be situated? City, beach or mountains?
• Do you want to holiday in the same location and property every year?
• How is the chosen location different in the winter and off peak seasons?
• How close is the nearest airport to the property?
• How good is the local transport system?
• What the tax implications for the chosen country?
• How good are the local social and health services
• What is the education system like?
• How stable is the economy and exchange rate?

Hidden Costs

Each country has a different buying process and it is important to research the market fully before committing to a property investment abroad. As Britain has some of the cheapest home buying costs, prospective buyers abroad may not be aware of all potential costs. Check carefully what local taxes are payable and if buying an apartment abroad, a service charge is usually applied. Local bills for utilities will usually need to be paid in a local currency. A local bank account can be set up to avoid paying handling charges for every transaction.

Other examples of hidden costs are legal fees which are a lot higher in France than they are in the UK, and regional and occupancy taxes. In Spain property valuations cost £100 and loans must be signed by the public notary, which can be expensive. When buying an investment property abroad taxes and legal costs generally amount to 10% of the property price.

It is important to employ a good English speaking solicitor when buying an investment property abroad. They will be able to fully understand all paperwork including terms and conditions, which should avoid any costly mistakes and being tied down to an unsuitable or undesirable mortgage on the investment property abroad. Beware that in many countries the solicitor is able to work for the buyer and the seller, so make sure any advice received is independent. Offers are not as easily retracted as in the UK.

Tax Implications

Inheritance tax laws can differ between countries and a will may need to be made in the country of the property investment abroad.

If the desired property investment abroad will be made available for renting, the income will have to be declared to the British tax office. Most countries have a reciprocal tax agreement to stop double taxation on overseas properties, but it is important to research this as an oversight could be costly.

Once the location has been researched and the finances organised, be it an off plan coastal apartment or a ski apartment, it is important to choose a property investment abroad that can be enjoyed as well as being a stable financial investment.