The appeal of buying a foreign property is easy to see, as it can provide us with a base in an exotic location or a way to diversify our investments. Before going ahead, it is worth taking the following major points into consideration.
Is it a Holiday Home, Retirement Home, or Investment?
There are many different reasons for purchasing an overseas property, and it is important to be clear on which one is of most interest you right at the beginning. For instance, the number of people retiring abroad has grown massively, with a reported 40% increase in Americans doing this between 2007 and 2017, according to Social Security Administration numbers.
In the case of choosing a retirement home, it is important to consider the location and the cost of living there. According to International Living’s Retirement Index, the best countries to retire to in 2020 include Portugal, Panama, and Costa Rica.
Alternatively, if you simply want to make a good investment then you should be looking at countries where the price of houses is expected to rise and rental incomes are high. According to Realty Times, this currently includes the likes of France, Spain, and Panama.
The Local Laws and Possible Legal Issues
How difficult is it likely to be to complete the purchase without getting caught up in red tape and legal issues? Most European countries have no legal restrictions over who can buy a house, although the language barrier and high levels of red tape can make life difficult in places like Italy and France.
Latin American countries are typically seen as being some of the easiest to buy in, with Remax mentioning Uruguay and Mexico among the most attractive options. In Asia, foreigners generally can’t buy land in Thailand, but can buy a property. In Vietnam, foreigners need to take out a leasehold of up to 70 years on land they want to live on.
The Importance of the Exchange Rate
Another huge factor to take into account is how far your local currency will stretch elsewhere. Given the cost of most properties, even a small change in the exchange rate can cause the final price to vary greatly. It is even more important if you plan to live there using income from your home country.
The Top Rated Forex Brokers site explains how the currency market works, and how traders can make money by speculating on the way the rates fluctuate. Currencies are traded in pairs, such as EUR/USD, and the price varies according to how the value of each moves compared to the other. Therefore, when buying abroad, it makes sense to track the relevant pair you will be using.
How Easy It Will Be to Renovate
In many cases, the property may need to be renovated or at least re-decorated. How easy this is will depend upon factors such as the price of the materials and the availability of good tradespeople to carry out the work. Then there is the question of whether it is going to be easy to get any necessary planning permission sorted out. You may also need to think of adding protection from storms and tornados in some places.
The idea of restoring an older property is popular in countries like France and Italy, where run-down houses in attractive areas can often be bought cheaply. In Italian towns like Cinquefrondi and Mussomeli, properties have been offered by the authorities for just €1, in an attempt to increase the population of towns that have become virtually deserted. However, it is important to ensure you are prepared for future costs.
There are many different issues to take into account when you dream of buying an overseas home. By concentrating on the main issues, you can increase your chances of making a purchase that you won’t regret.