It’s a serious investment that takes time, planning and a substantial amount of paperwork to achieve - even more so if you’re buying property abroad. Making a wise purchase demands entrepreneurial instincts and an insightful understanding of the market you’re entering into.
It’s a serious investment that takes time, planning and a substantial amount of paperwork to achieve - even more so if you’re buying property abroad. Making a wise purchase demands entrepreneurial instincts and an insightful understanding of the market you’re entering.
Most real estate agents agree that location is the single most important factor to consider when buying property abroad. Think about it; you can’t dig up a house and move it to a better neighbourhood. Unlike fixtures and fittings which can be remodelled and updated, environmental factors influencing the nature of your location can’t be controlled. This is why you need to go through this 5 point checklist to make an intelligent investment and avoid potential errors.
Advices on buying property abroad
Choose Areas with Upward Mobility
Search for countries, regions and suburbs where property demand is on the rise. Your natural instinct will probably compel you to seek out plush, well-established areas where you know rental remains high and properties are sought after. The drawback with this idealistic way of thinking is that the dream property you want might stretch your budget too thin and you could miss out on better investment opportunities.
When buying property abroad, it’s better to zone in on up-and-coming areas so that your property value can escalate over time. Phone around and find out which areas are already undergoing large scale developments; this indicates there’s already a demand for real estate which will increase the value of the area’s properties in due course. Calpe, in Costa Blanca, is a great choice due to its recent upward growth and increased interest from parties both in Spain and abroad.
Purchasing property can be overwhelming - developers, agents and private sellers will always market their offering as the “best value for money” and if you don’t know the area, you might find it difficult to make an accurate assessment.
Do some number crunching and research the average rental income per square metre and opt for a suburb where this is high in comparison to the property value. Even if you don’t want to rent your property out forever, owning a high rental income location will enhance the value of your asset when the time comes to sell. Choosing a popular holiday location ensures that you will always have rental options available.
Look at Recent Sale Prices
There’s no way to know if the selling price is reasonable until you’ve scouted other properties in the area. Search online, visit agents and read the newspaper to build an accurate ballpark figure before buying property abroad; when the time comes to negotiate with the seller, you’ll have enough knowledge to make a fair purchase.
Look at Vacancy Rates
Just because the area looks inviting doesn’t mean its real estate makes a wise long-term investment. If you’re wanting to make the most of the region’s rental market, then you need to find an area with a low-vacancy rate. High-vacancy rates indicate a less sought-after area which could impact negatively on your resale value and make it difficult to find consistent tenants for renting. Tourist hot spots and holiday destinations like Calpe are usually the best areas to buy in because their rental market is high.