Overseas Property Tips
People are just starting to dip their toes back into the property investment pool. The past decade has been rather daunting for investors of both personal and commercial property, but there is one market that has been experiencing the slow but sure signs of a resurgence: Overseas properties.
Whether it is to have a second home for holiday or work, or an investment property as a second stream of income with buy-to-let, or a commercial relocation, there have been signs of life when it comes to purchasing overseas properties. Let’s delve into some facts about overseas property investments: The good, the bad, and everything in between.
Foundations: Know The Stats
Don’t think about domestic or overseas property investment without collecting data. For your convenience, we have collected information about some of the more popular countries to invest in.
Here is our 2015 Mega Overview of Real Estate and a similar one for 2016 that will summarize all the important data for all the important destinations. You can also review our Currency Trend overview for 2015 and 2016 to learn more about the economies.
There is a lot of room for growth
You can’t even turn on your radio without hearing about how some of the housing markets in Europe have hit their absolute lowest possible value. Think Spain. Or Greece. The market over in these visually stunning and culturally rich countries (that are hot spots for tourists) has dipped to all time lows. Why is that a positive? Because it offers a lot of opportunity for growth. In just the past year, real estate owners who let their properties have experienced a jump from 4.7% yields to nearly 6%. Istanbul has experienced a 7% increase in yields in the past year, and the capital growth of the past year has been 20%. Properties are priced low and the economy is started to rebuild. This is a perfect storm in real estate investments.
There are a lot of scam artists
As with any huge opportunity, the bad guys have found their way in. Many individuals who have been interested in investing overseas have found themselves victims of scam artists. The difference here is that these scams appear to be perfectly legitimate and many people who have sunk their entire life savings into their traps have lost everything they have. Another common type of scam doesn’t come from the parties doing the investments, but rather the interpreter that the investor has hired. The good news is that the governments are keen to this type of crime, and are cracking down hard on the perpetrators. Still, invest wisely and responsibly and properly vet your interpreter.
A low value property can have a huge commercial value (especially when you consider the strength of your dollar). As mentioned above, investment properties have a lot of room for upward momentum. However, without considering that aspect of the investment, an overseas property could translate into a high commercial yield for the investor. Whether tourism based or resale/let options, a smaller investment upfront could result in large returns. This opportunity is magnified greatly when you balance with it the value of your dollar. Compare and contrast the strength of your currency with the country that you want to purchase in. In some cases, you could be instantly receiving a discount on your purchase based solely on the current international monies market.
Some of the hottest opportunities overseas involve some of the most well traveled places on Earth
In real estate decision making, professionals tell us that there are only three factors that you should consider when purchasing property: Location. Location. Location. To maximize your success when purchasing an overseas property, look for the value of your purchase based on location. What does that mean? Look for a place where you can get the highest possible return for your investment in the location that will give you the highest probability of growth. Here are some ideas:
Barcelona, Spain The Spanish government is eager to have overseas investors bring their business to Spain. With Barcelona being one of the most iconic cities in the world and known for its exquisite beauty, it is a magnet for tourism. In just two years, many overseas investors have already doubled or tripled their initial investments in properties purchased in Barcelona through tourist rentals alone, according to one report. This landmark iconic European hotspot is perfectly positioned for investors to come in on buy-to-let properties.
French Riviera Now, true. This location has not been hit by a devastating and dismantling recession. The French Riviera continues to thrive and be home to many well-to-do individuals. The properties are still high end and not inexpensive. So, why is it the right time to consider purchasing there? Because the government recently cut the capital gains tax by a staggering 25%. People who buy-to-let in the French Riviera will benefit greatly by this tax cut. Those that choose to rent or visit the French Riviera are usually those with greater means and the ability to pay a higher rate. If you have the means to do it, this is a great time.
Turkey As mentioned previously, the opportunity for growth in Turkey has proven to be substantial in the past two years. The number of overseas purchases made in Turkey has risen by 78% since late 2013, with the bulk of those purchases being in Istanbul. This is a major hot spot for tourism and a gigantic opportunity for buy-to-let properties. Istanbul and Turkey in general are seen as a safe and authentic means with which to experience the Middle East. Tourists are willing to pay a significant premium in order to visit this beautiful land.
Bear in mind! In some countries it is exceedingly hard to get your hands on property without becoming a citizen. Be sure to deal with countries where you can naturalize easily.
Clicking on a banner will take you to EverythingOverseas.com, the authority site in overseas property and expat services.
Final Tip: Sending Money Overseas
We at MoneyTransferComparison.com strongly advise using a commercial Foreign Exchange firm to transfer your funds abroad. They allow much greater flexibility thank banks in several factors: pricing, locking today’s rate, paying in installments, and the specialized ones like TorFX and Currencies Direct even offer property-specific advice on other things such as taxation and processing. While banks provide a number of services (and usually not that well as our Natwest bank review tells us), foreign exchange firms focus on one thing – getting your the best currency deals.
Whether for investment means or simply wishing to be the envy of all your friends, overseas property investments are easily attainable and the timing is quite right for many. Do your research, work with professionals, and find the right investment for you and your future.
This article is a part of MoneyTransferComparison’s Magazine (Property, Moving Abroad and Expatriation):