Doing what I do for a living , " where ’ s the best place to buy abroad ?" is a common dinner table question posed by colleagues and friends .
The best place to buy abroad
Personal use and enjoyment
The inability of many people to borrow to the extent that they could 5 or 10 years ago in order to finance a foreign property purchased for cash is largely gone , and has depressed values in a number of markets . Spain immediately springs to mind . However , the old adage that ‘ one person ’ s misfortune is another ’ s opportunity ’ is coming to the fore .
As well as being kept very busy these days with Spanish property transfers brought about by inheritances and ‘ life events ’ ( buyouts between co-owners , family breakdown and financial difficulty ), I do act for a lucky few who are still able to take advantage of depressed market values to buy their hard earned holiday or retirement homes at well below what they ’ d budgeted for a few years ago .
Doing what I do for a living , " where ’ s the best place to buy abroad ?" is a common dinner table question posed by colleagues and friends .
I typically hedge everything I say with a lawyerly like health warning that I ’ m an international property lawyer and don ’ t profess to be a global real estate investment guru .
Before telling them what they really want to hear , I see the minor irritation spread across their faces when I turn the tables and ask a few questions first . The penny soon drops though .
My main question is always : “ Are looking for an overseas property as chiefly an investment or as a holiday or retirement home ?”
Investment
If your chief motivation is investment you have another key question to ask yourself ; ‘ Are motivated by the prospect of capital growth or rental yield ?’ Different markets offer very different opportunities .
It ’ s fair to say that the prospects of short-term capital growth are pretty slim in many of mature global property markets . I have recently read reports by industry commentators which seemed to indicate that the strength of specific local or regional economies tend to be the main driving force underpinning any substantial capital growth in today ’ s emerging markets . Far East , Hong Kong seems to be leading the way here , followed by Turkey , Russia and , a little closer to home , Austria .
If you are looking at the prospect of high rental yields , then you really need to study each local market very carefully and be absolutely sure of what net returns you can realistically expect to bank after all taxes and expenses . Do your research , and you might be surprised . I ’ ve been asked recently if we ’ d protect investors ’ interests in an investment in Iraq where rental potential appears particularly attractive !
If you ’ re looking to join them , then my advice would be to check whether you actually like the place or not . That might sound blindingly obvious , but there are loads of people who buy straight away , in a country they barely know with little understanding of the local property market , only to regret having not done their homework and bought further down in what they soon learn is the ‘ right ’ area .
If you are not already familiar with the area , rent before you buy . That way you ’ ll get a much better feel of what a place is actually like to live in all year round . Do you want to have the comfort of a local ex-pat community with shops stocking things like marmite Yorkshire tea , or do you want to get stuck in with a local community and get as far away from other Brits as possible ?
Line up your ducks
If you are looking to bag the proverbial bargain , then preparation is key and , now more than ever , cash is king .
It ’ s a buyers ’ market . Put yourself in a position of strength by understanding the process and procedure . It ’ s best to instruct a lawyer and have your finances in place before you step on the plane , not afterwards .
Happy hunting ! By Dennis Phillips
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