Investment property abroad

[brian]

Anyone here have any experience of buying an investment property abroad?

If I were ever looking to buy in property as an investment, I think overseas property may well make for the best option, not least because UK property is so expensive.

However, are there any general rules to keep on board - and any obvious pitfalls to watch out for?

[tommyinturkey]

Anyone here have any experience of buying an investment property abroad?

Hi brain
I have 5 years experience of selling turkish property's.should you or any one else have any buying /related question's on turkey, i will only be to glad to oblige.
Tommy.

[omostra06]

i bought an old farmhouse in central portugal 2 years ago to restore as an investment, prices for these types of property have really gone up over the last year, weve also been looking around to buy other old houses to rebuild. plenty around but just finding the perfect place takes time.

[omostra06]

we bought an old farm house in central portugal with a view to restoring it and possibly selling if we find another project that interests us.

[tater03]

I have never acutally done this myself. But I do have a friend that bought an apartment building over in Mexico because our money goes farther their. I am not sure on the leagalities of doing something like this though.

[letstalkturkey]

Take your time and get it right!

Bying property abroad requires basicaly the same care and attention as it does in the UK. In general terms:

• don't ever be swayed by sales talk - take your time as property doesn't sell overnight especially with prices now being much higher than a few years ago
• if there is money involved do your own research
• location, location. location - make sure you buy in the right place
• it may be a pretty property but can you get a bus to town?
• research everything before you pay a penny
• decide if it's for income / personal use
• if you are renting - how are you going to do this? Who is going to do this? Will the income really cover the mortgage?
• get referrals from other buyers
• get a good, independent solicitor
• get a good interpretor
• get a contract
• never pay money to a developer, agent or third-party
• don't forget to add on the extras - allow 12 - 25% for extras depending on where you buy
• don't forget about capital gains - sell early and you'll lose a packet
• you can furnish your property more cheaply if you don't buy a furniture pack

The issue is here that in general terms a lot of property, espcially in Turkey where we specialise, is cheap. It is true that £20K - £30K buys you a holiday home. However, decide early if it's just for you or if its an investment - don't mix these concepts. If it's for you then you can safely buy based on your own criteria. If it's an investment for rental, the criteria for buying will most likely be completely different. While you might want an idillic cottage in the mountains, your clients tend to want swimming pools, beaches, entertainment, night-life, easy transport, shops, restaurants etc, parks for the kids etc.

All the best - Dave

[omostra06]

some good info on central portugal if anyone is interested in property in this area.
www.gekkoportugal.com

[Goldberg Global]

Property Investing Overseas

When investing your money overseas be in it stocks, shares, properties, bonds etc, you have some basic questions you must ask yourself and have knowledge on the places that you are placing your money into.

The basic questions and very important questions are
1. What are the returns going to be on my money.
2. What are the risks I am going to take.

The returns are they property yields, ie. from rental income.
Then you have to look at what it costs you per year in government fees, taxes, management costs etc. Also you need to look at capital appreciation.

The flip side is the risks. Political. Geographical. Currency. even to micro risks, like is the developer going to build my unit! So you have to manage risks.

Then you add it all together and come out with a conclusion. And 90% of the time, you can do all your possible homework and then still make an informed decision, but I also think you have to use your internal intelligence, ie. does this feel right, does your stomach, gut tell you this is a good place to put your money.

Most investors are not hard and cold, number crunchers, they buy on emotion. Which is good for sellers, not for buyers.

Take Spain, the principal market. Most people do not know if they rent there property in Spain the government takes 25% of the income. You make a 100 pounds on your apartment you only get 75 pounds then you have to pay for maintenance, land taxes, other bills, and the cost of the property is quite high, it all in all, does not add up. Over supply of product means low yields. Management and rental costs. etc.

The reality most people buy from lack of knowledge, lack of knowledge on finance and taxes on emotion. So they dont always get the best deal.

[Goldberg Global]

I wrote a long answer, and it was deleted. I thought was quite good, so why was deleted.

[brian]

It wasn't deleted - the anti-spam feature picked up your email as potential spam.

If you'd like to push on advertising commercial services here, I'm sure I can offer you a commercial rate to serve it.

[callmemonkey]

I have purchased in southern Spain in 2004 and sold for a decent profit, although the fact that I knew some reliable agents out there really helped. The market there is not good now though and very pricey. You really need to find the next up and coming areas if you want to maximise your investment. I know someone who bought a 3 bed house in Slovakia for well under £20,000. His wife is from there so that helped with the research. I am doing some web work for a company that sell in Calabria, southern Italy. You can check my profile to see the URL and get some info (if thats allowed on here).

It's very important to work out how much a rental property will bring in, never expect the return to pay the mortgage. Some people are lucky to rent properties out for 4 weeks a year if the area is saturated with similar rental properties. Look out for 'For Sale' signs everywhere .

Most importantly do plenty of research, get good legal advice, speak to other owners in the area if you can and remember about extra taxes when you buy and sell, the agents probably wont mention too much about those. If agents talk of huge price rises that will continue, ask for proof of sales in the area similar to the information we can get from the Land Registry.

[brian]

Good points, and welcome to Property Watch.

[[email protected]]

HI everyone! One of the biggest steps in people’s lives is the purchase or sale of a home or investment property, and this is especially true when investing in a foreign country.
I will try to give you my reasons why to invest in Dubai.
• First of all is future demand: Population is destined to increase from 1m to 3m whilst tourism will also triple from 6m to 15m, by 2010
• Also there is future supply: to manage the demand-supply ratio carefully thus maintain strong growth & returns it is Government controlled
• 0% Capital Gains Tax
• 0% Rental Income Tax
• Reagarding to Legal & Notary Fees: None required, although legal advice is recommended
• 1.5% Land Registration Tax is paid to the Government on completion
• 1-7% Transfer Fee is paid to developer on resale of contract before completion
• Simple buying process. No Company formation is no National registration required
• Payment Structure: Following an initial reservation deposit, a deferred payment structure is usually provided by the developer with payments spread over the construction period
• Finance: This is available to non-UAE residents only on certain projects, with competitive interest rates from 6 - 9%, and usually with 15 yr terms and reasonable conditions
• Capital Appreciation: Recent years have risen between 15 - 25% annually
• Rental returns: Recent years have returned between 10 - 20% annually
• Freehold: The right to obtain freehold rights on your property is provided with most non-UAE purchases of property.
• Resident visas are supplied with non-UAE purchase on property

So as you can see there's no taxes of any kind no even hidden.With an escrow account you have the assurance, security and safety that your monies are protected by an impartial third party.

Always happy to answer your questions
Kind regards.

[brian]

But Dubai is something of a property bubble at present, isn't it?