RESEARCH RESEARCH RESEARCH
Fail to prepare and prepare to fail! Buying a property abroad can change your life but if you don’t know what you are doing, it can seem confusing and tiring! Luckily there is a honey pot of knowledge out there and you can learn from other people’s experiences to help you on your way. Getting information from multiple different sources will help you compile an image in your mind of what you really want and what needs to be done. Doing your own research is important as it means you can be confident you are doing the right things and asking the right questions along the way.
- Why you are buying a property abroad?
- How will you finance this purchase?
- What due diligence do you need a lawyer to do for you?
- What are the costs of sending money in & out of a foreign country?
- How you can make your move a permanent one?
- How can you generate rental income?
Understanding the buying process
It is obviously important that you understand how the buying process works in the country you’re planning to buy in. Having even a basic understanding of the legalities of said country, will save you a lot of hassle later.
Talk to your estate agent about anything you’re unsure about. Question everything that doesn’t make sense to you, the buying process abroad may be very different to what you’re used to, so don’t be afraid to ask. As they say – information is power!
You should be aware that if you are buying a property abroad you are covered by the Consumer Protection Regulation (CPR) which sets out the guidance for how agents who market property to UK buyers should behave. More details and information can be found on the website of the Office of Fair Trading.
WHAT ABOUT THE MONEY, MONEY!?
Falling in love with and buying a property, anywhere in the world, is one of life’s biggest purchase decisions. This means it’s important to be prepared and have a clear plan, especially when it comes to your finances. Here are some things to consider.
- Is cash purchase an option?
- Will you need a mortgage and for how much?
- What will you need to pay and when?
- Are there additional costs, such as legal fees?
- Do you have a pension you could invest in overseas property?
- If you choose to sell later, what will it cost and what is involved?
The 3 options that are available if you require a mortgage to purchase are:
- You can remortgage your UK property.
- Take out a new mortgage from a UK lender to buy overseas.
- Borrow from abroad via a specialist broker.
Once you have worked out your budget and continued with some research, you could consider all of the above, therefore enabling you to visualise your options and make an informed decision on which suits you best.
Various specialist intermediaries are now ready and available in the market to give you more information on this. They will also put you in touch with an FSA regulated Independent Financial Advisor who can talk you through this option in more detail and help you decide if it is suited to you.
THE CURRENCY CONUNDRUM
It is highly advisable to use a firm that specialises in currency transfers when you come to send money abroad for buying a property or emigration purposes. This is because specialist currency companies consistently offer better exchange rates than most banks for foreign currency transfers. They also have clever ways of protecting your money from fluctuating exchange rates between the point of agreeing to buy property abroad and completing on it – during which time the price in Sterling can vary dramatically.
Currency specialists are often overlooked by overseas property-buyers, who frequently assume the only way to send money abroad is through their bank. Choosing this option could lose you a considerable amount of money unnecessarily. The savings offered by currency firms can feasibly run into the thousands for high value transfers, such as the funds needed to buy a property abroad.
- When exactly are you planning to buy a property?
- What is your budget?
- What will the potential recurring costs of owning a property be?
- How fast will you need access to the local currency?
Fix your rates in advance
One of the biggest benefits of using a currency company is the fact that they can work with you to fix a competitive exchange rate for a future transfer. This means that you can fix the cost of a property you want to purchase and not have to worry about currency fluctuations whilst you’re waiting for the sale to be completed. Being able to secure an exchange rate for up to a year is also beneficial if you have to make recurring overseas payments. For example, if you make a monthly mortgage payment in a foreign currency, you’ll know the cost in Sterling won’t change each month.
LAW & ORDER
Buying abroad will be much simpler if you use a lawyer who is from or familiar with the law in the country in which you are looking to buy. The buying process is likely to be different from country to country and your lawyer will be able to help you with all of the tasks necessary to ensure a smooth purchase. Just a few of the tasks that most lawyers will perform are:
- Translating and interpreting all legal documents
- Handling and placing of deposits and other fees
- Understanding and if needed, amending contracts to safeguard your interest
- Drawing up a Power of Attorney if you are unable to attend the final signing
- Checking over the searches and the final conveyance document that will transfer ownership of your new home to you.
There can sometimes be complications when purchasing a property overseas. The most common issues are related to properties with no title deeds, taxes being owed on the property that are then inherited by the buyer and in more severe cases; properties being built without planning permission and having to be demolished. This is why it’s essential to have a good, local lawyer on your side. You should also try to find out what building work is planned in the local community, in particular the space around the property you are buying as any development work done may have an effect on the future value of your new home.
Choose a lawyer who speaks both your language and the language in your location of choice. This will make the process much smoother.
ARE YOU READY FOR A VISIT?
When buying any property, it is recommended you go and see it for yourself. This can be a great opportunity to get a feel for the local area as well as meeting the seller face to face.
Here at Roccabox we can arrange your itinerary so that you can see lots of properties in a short space of time. This makes it easy to get a feel for the properties available, the areas, your likes and dislikes and find that perfect place for you.
When looking around possible new homes, we can help you with things such as what to look for, how to identify what you like, and when to walk away!
We always ask our customers to consider the below when looking around potential homes:
- What is your initial impression?
- Is there anything that you instantly love?
- How do you feel standing on the street?
- Can you imagine your family in the house?
If you are getting a good feel from a home and then see something that you don’t like, first think how easy it would be to change it? Would that change fit into your budget? Sometimes we can be put off by minor and easily changeable details!
All these questions will help you on your journey to finding that perfect property in the sun, that you LOVE!
Renting a property in the location you want to buy in can be a great way to research. You get to see how the rental market works, away from the big tour operators, and get a feel for actually LIVING in that area.
Whilst out searching for property don’t be shy. Expat societies and social clubs will be full of people who will no doubt have fun experiences to share with you!
THE BIG MOVE
The most exciting part is here, you get to move into your paradise in the sun, what should be going through your mind?
- How are you moving your belongings?
- Are your belongings insured upon arrival?
- Do you need to buy anything you could not bring or didn’t already have?
- Is the property insured?
Label boxes in both languages – If the language in the country of your new property is different than your own, Google translate simple but important words and phrases such as ‘BREAKABLE’, ‘THIS SIDE UP’ and ‘FRAGILE’.
In the UK, most of us have both buildings and contents insurance and it is no different with international properties, it’s prudent to protect yourself as much as possible so if something unfortunate happens during the move or following it, you do not end up with a loss.
There are various insurers who offer both contents and building insurance. Where international property policies differ to most standard UK policies, is that some policies also offer personal cover for those using your property. This is especially important if you are letting out your property for part or all of the year. Without it, if someone injures themselves you may be liable. Get in touch with a number of different companies to gather as much info as possible and find the best cover for you.
Removals and Shipping
When arranging which removals company to use, ensure you contact a few to establish the best price and also the best way of doing things. There are a number of options to choose from, including Sea or Air freight. There’s also the opportunity to group your items with those from other individuals or companies, which helps lower the cost. The British Association of Removers (BAR) is the industry trade body and is a good place to start to look for prospective companies to work with.
Remember to budget for these final stages of the move. You need a reserve fund to cover the costs of moving your existing possessions as well as the purchase of new ones and subsequent insurances.
If you are planning to offer your new home in the sun to let, the first thing you should figure out are the laws that surround letting property in that country. There may be legal obligations and tax laws that you are not aware of so make sure you speak to your lawyer or solicitor and inform them that you intend to let out your new property. If you are buying a property on a complex or a resort then there may be certain restrictions or obligations that you need to adhere to. In this case, make sure you speak to the property management company or the person in charge of the resort community. You will also need to make sure your property has the relevant insurance for your guests as well as buildings and content insurance.
Once you have checked you can legally let your property and you have the relevant insurance, you’ll want to start to promote it to holidaymakers.
There are many ways to promote your holiday home including:
- Holiday Rentals Websites
- Expat Websites
- Local letting agents
- Social media
- Friends & family
- Referrals from previous tenants
Remember to set yourself (and stick to) a marketing budget so your property can get as much exposure as possible. If you’ve been careful and are willing to invest not just your money but also some time, then letting your property could be a great income generator.
Think OUTSIDE the box when it comes to marketing. What can you do that is free, will your family/friends be willing to help you promote and gain exposure?
SELL YOUR PROPERTY
If you have made the decision to sell your property, it’s important to make it appeal to as many people as possible. Just a few small changes can make a big difference.
- Keeping the property clean and tidy at all times
- De-cluttering your property as much as possible
- Using neutral colour schemes throughout the property
- De-cluttering your property as much as possible
Imagine yourself as a potential buyer, walking through your home. Look out for easy fixes that will make a big difference to the appearance and ambiance of your home. eg. scented candles!
Selling with Roccabox
Here at Roccabox we will actively sell your property for you, arrange viewings and liaise with potential buyers on your behalf. Contact us for more information on how we can help you keep this a fast, hassle free and profitable process.