If you are considering Buying a Property in another country or just diversifying your real estate portfolio, then there is a lot that needs to be considered. The last thing you want to do is end up purchasing something that turns into a complete nightmare. With that being said, read on to discover some of the most common mistakes you need to avoid when purchasing a property overseas.
1. Failing to conduct enough market research – There is only one place to begin, and this is with a lack of research. There is no such thing as too much research when it comes to discovering more about the property market you are thinking about investing in. After all, there is so much to find out. You need to assess property prices, both now and forecasted prices for the future. You must research average rental yield – don’t merely take the estate agent’s word for it. Ask them what they are basing their figures on. You will want to find out whether the country is stable, as well as whether there are any restrictions in place in terms of what foreigners can and cannot purchase. In some countries, foreigners are prohibited from buying property altogether, so you really do need to research legal matters at the earliest opportunity to avoid disappointment and scams too.
2. Not looking into housing schemes – No matter where you are thinking about purchasing a property, it is a good idea to find out whether there are any housing schemes available. In most countries, these schemes will only be available to nationals and full-time residents. However, if you are planning on moving to the destination, then it may be an option that is open to you. Take Singapore as a prime example. An affordable HDB flat may be something you are eligible for if you meet the criteria of one of the schemes that are in place. This would give you the option of purchasing a property from the housing association under a temporary leasehold of 99 years. In some countries, there are incentives for foreigners to purchase property, so make sure you explore all options.
3. Overlooking professional translation services – When buying a property in a country whereby English is not the country’s predominant language, you need to get the contracts translated professionally. You may think this is unnecessary. After all, you have been provided with an English version of the contract, as well as one in the local language. However, how can you be certain that these two contracts match up? One typo or mistranslation could make a massive difference. This is why it is a good idea to pay for the expertise of a professional translator who can make sure both contracts match up before you sign on the dotted line.
4. Rushing into the process – It can be very tempting to rush into the process of buying a property overseas. You are excited. You want to get the ball rolling as quickly as possible and start making some serious cash. However, rushing into the process headfirst can be a disaster. It’s better to be over cautious if anything. You are stepping into unknown territory, so conducting all of the necessary research first is pivotal. Of course, if you are moving abroad, you may not have a lot of time on your side. You may need to move abroad by a certain date for job purposes. This does not mean that you need to purchase a house by then, though. Why not rent a property until you feel settled in the country, and you know where you want to live and what type of house you want to live in?
5. Underestimating the costs – A lot of people make the error of underestimating just how much it is going to cost them to buy a property in another country. If your calculations are short, you could end up running out of money, which would be a disaster. Make sure you take the time to put together an immaculate financial plan, which incorporates each and every cost associated with moving. This means everything from taxes to the cost of moving your furniture overseas or buying new furniture. Remember, the costs associated with buying a house aren’t going to be the same as if you were buying a property in your home country. There are going to be different legal fees and taxes to pay for starters, and then the prices of goods and services are going to be different too. You will need to carry out a good chunk of research when putting your plan together.
6. Planning permit mishaps – Last but by no means least, we have Planning Permit Mishaps. There are a number of problems that could arise with regards to planning permission, including invisible permits, corrupt permits, and incorrect permits. Your dream purchase could be demolished if you do not have the right permit. This is why you must investigate permissions and permits on a property purchase overseas with the same level of detail as you would at home – if not more. You also need to check out local rules, as they could differ from legislation that is in place regionally. This is where a good independent lawyer really shows their worth. They can advise you on the rules and regulations that apply to your property.
If you can avoid the mistakes that have been mentioned above, you can give yourself the best chance of ensuring everything runs smoothly when buying a property in another country. It is important to recognise that things are done differently overseas, so never assume that the property market is going to be similar to what you experienced when buying your first property in your home country. Conduct as much research as possible to stand yourself in the best stead.