Buying property overseas is a bold move to take, and one with potential pitfalls. You’ll want to keep the following tips in mind as you get started.
When you think ahead to retirement, do you picture yourself living in the same place where you grew up, surrounded by friends and family? Or do you picture yourself lounging about on a sunny beach somewhere foreign and exotic? If your ideal situation veers towards the latter, you may want to start considering the possibility of investing in an overseas property. A second home abroad can serve as a source of rental income both before and during retirement, a home in the sun for holidays abroad, and eventually a permanent retirement residence. Yet buying property overseas is a bold move to take, and one with potential pitfalls. You’ll want to keep the following tips in mind as you get started.
Create a Realistic Budget
Before you start viewing properties, it’s time to take a hard look at your finances. Will you be purchasing this property as a second home, or selling your primary residence first? What do property prices look like in your city and country of interest? Real estate Brisbane will fall into a different price bracket than real estate in Madrid or even in Sydney. Take the local market into consideration and set a firm budget, so that you’re not tempted to look at properties beyond your top price point. Features like courtyards, gardens, and swimming pools are attractive, but they also require care and maintenance.
Choose a Rental-Friendly Location
Even if you expect to move into your property immediately, it’s helpful to view it as an investment property as well as a home. If you need to return to your home country for an extended period of time, will you be able to rent out the property easily? Properties in coastal communities or within urban centres tend to be the easiest to sublet or rent on a long-term basis. How far is the property from conveniences like restaurants, nightlife, parking, hospitals, and shopping? Take your time and make sure the location ticks all the boxes not only for your personal needs, but also for potential tenants.
Consider the Currency Differences
If you’re arranging a mortgage in a foreign country, small changes in currency rates could lead to you paying significantly more or less than you bargained for. It’s a good idea to secure a specific rate of exchange in your contract, to avoid these fluctuations.
Use Local Professionals
Every country has different laws related to real estate, which can be difficult to sift through even if you’ve spent a lot of time abroad. It’s helpful to hire an independent lawyer who can help you through the purchase process and give you pertinent advice. Other professionals you may need to consult include architects or surveyors, to inspect your potential investment and ensure that it’s up to all local standards and building codes. A local accountant would also be helpful, as he or she could help you learn more about capital gains taxes and set up systems to pay local or national taxes abroad as needed.
Buying a retirement property overseas can be a real dream come true, but due diligence is needed to make sure that you’re really getting a sound deal that you can afford. By taking the time to do your research and seek professional assistance as needed, you can find a house in the sun to make the most of your golden years.