1. Always do your homework
The same key thing applies wherever you invest in the world: Location, location, location! Do your research. Find out about local infrastructure, facilities, other developments, plans for the local area, transport links – all sorts. Does your planned investment tick all the boxes? Do some background research on the developer, too.
2. Always take independent advice
Use financial and legal advisers with a proven track record and take advice only from people acting solely for you. Stay involved, ask to see all documents and check them thoroughly. Take independent financial advice well in advance, to make sure you can structure a deal as favourably as possible and secure the most advantageous finance options.
Remember that an independent financial adviser will have access to the open market for mortgages, whereas a bank or building society is tied to its own products. Talk to other people in the market, too, such as good estate agents.
3. Avoid ‘cheap’ or ‘free’ inspection trips
Don’t be taken in when a property company offers you a ‘free’ or ‘cheap inspection trip’. This will be a very restricted group visit where you’re escorted at all times and you endure a hard sell throughout. You won’t necessarily be able to see the properties that are right for you.
4. Check the official planning permissions
If you’re buying off plan always ask to see the relevant planning permissions before you part with any money – and make sure the permissions that have been granted are appropriate for the type of land the property will be built on. If you invest purely on a promise of plain sailing, you may never actually see the property built! Find out about local restrictions and controls on building size, height and usage. Will the developer comply?
5. Budget for all the fees
Build all your costs into your financial plan. Include legal fees, administration fees, duties, travel costs, local Land Registry search and registration fees, etc. What other hidden costs and obligations will you have if you’re part of a development with shared facilities?
Take note of general household bills too, once you’ve completed, such as community fees, rubbish collections, water rates and utilities.
6. Take account of tax
Be aware of what taxes will be due from the point of completion and beyond. What happens if you take money out of the country where your property is located? What about income tax? Find out about any wealth taxes, local taxes, sales tax and/or stamp duty.
7. Pay attention to the detail
What kind of mortgages are available for your particular investment. Should you make a Will in the country where you’re buying? Consider language issues and currency considerations.
Once you’re fully prepared, and with the right partners in the process, buying off plan property overseas can be an enjoyable – and financially rewarding – process.