Buying Investment Property Abroad
The last few years have seen a huge surge in people buying investment property abroad. For example, according to a 2005 Barclays Bank survey, 5% of respondents (equivalent to 2.2 million British) already own property abroad and a further 5% said they would definitely be investing abroad in the future. With favourable foreign exchange rates and ridiculously high property prices back home, it is no wonder that many more people are realising that buying an investment property abroad is the way to go.
Whether you are a seasoned property investor, or just starting to build your portfolio, you can count on expert advice from Día Soleado Invest to help you realise your full investment potential. Here are a few basic things to keep in mind when investing in property abroad.
Buy off plan property to maximise your return on investment
You can save a substantial amount on the purchase price when you buy your investment property abroad off the plan. Completion time frames can be of 18 months or more, during which you cannot count on a rental income, but price savings should more than make up for this. Also, because you would usually be expected to pay in instalments as the construction project advances, you can borrow money as needed and save on interest.
We invite you to view our extensive range of exciting off-plan investment opportunities at Día Soleado Invest. We also have some very interesting deals on finished property. If you are looking to obtain an immediate income from your investment, be sure to check them out!
Make sure you can get a mortgage
Most banks will finance up to 80% of the purchase price when you are buying an investment property abroad. Also, banks usually calculate around 35% of your income for mortgage repayments, which puts a limit on the amount of money you can borrow at any one time.
At Día Soleado Invest, we work with numerous financial and lending institutions. This puts us in an excellent position to help you find the best mortgage deal for your particular situation. Don’t sign your mortgage before enquiring with us!
Don’t rely solely on rental income
Although it is possible to have your investment property pay itself off through rental, it is not wise to plan to rely on rental income for 100% of your outgoings. You should consult a local specialist for a realistic rental valuation and make sure that you can cope financially with any periods of unforeseen vacancy.
At Día Soleado Invest, we undertake in depth studies of the rental potential of all investment property we offer and can advise you on what you can reasonably expect to earn. Also, many of our buy-to-let properties come with minimum rental guarantees for your additional peace of mind.
Hire a local lawyer to represent you
When you are buying investment property abroad it is very important to hire a reputable local lawyer, fluent in your own language, to look after your interests. Among other things, your lawyer will usually be responsible for performing the necessary background checks on the property and providing you with translations of contracts.
At Día Soleado Invest, we work with a number of trusted lawyers and would be happy to put you in touch or help you out with any legal inquiries you may have.
Find out about your tax obligations
Find out what taxes you will have to pay on your investment property abroad – both as regards income tax on rentals, as well as capital gains tax and any other charges that fall due when you sell the property. Make sure to account for these expenses when calculating your expected return on investment.
If you thought that nothing is certain but death and taxes, you’re only half right! Contact us at Día Soleado Invest for expert advice on limiting your tax liability.
Investigate local inheritance laws
When you are buying investment property abroad you should remember that inheritance laws where you are buying could be very different from those back home. Find out about the implications and also whether it is advisable to make a separate overseas will.
This is another area where we can offer valuable advice on how you can protect your investment and spare your loved ones unnecessary expenses when the time comes. Ask us for more information.
Calculate your cost of ownership
Make sure that you are well aware of the costs of maintaining your investment property before you commit.
These costs usually include local council taxes, community dues, water, electricity and gas meter rentals, property insurance, general maintenance and so on.
If you are investing with us, you’ll find we’ve already done the homework for you. With our detailed area and property studies, you will know exactly where you stand.