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10 Things to Consider When Investing in Overseas Property

10 Things to Consider When Investing in Overseas Property
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While the global real estate market may have enjoyed months of uninterrupted growth, large-scale investors have recently begun to sell luxury properties amid fears that surging prices are creating a bubble. Although this may represent the higher end of the property market, it is a worrying development at a time when the global economy is finally beginning to emerge from the shadow of long-term decline.

This is just one aspect of the real estate market, however, which continues to evolve and create new challenges for investors and vendors alike. Just recently, British real estate firm Property Rescue collaborated with the national ombudsman to launch a new National Association of Property Buyers (NAPB), which will operate in the controversial “Quick House Sale” sector and provide self-regulation that protects both investors and home-owners alike.

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Luxury Real Estate

    The Key Considerations When Investing in Overseas Property

    Whether buying a home domestically or overseas, there are clearly a high volume of challenges that need to be overcome if you are to safeguard your investment. These issues are amplified when buying property abroad, especially if you are expanding your portfolio into new and relatively uncharted territories. With this in mind, consider the following factors before finalizing your international real estate investment.

    1. What is your reason for buying overseas property?

    This is arguably your single most important consideration when buying a property overseas, as it will have a direct influence on everything from your budget to the type of insurance that you invest in. If you are buying a property for the purpose of investment, for example, you will need to execute all financial decisions in line with your estimated return. If you are purchasing a home with a view for relocating, however, you will need to focus on standard considerations such as the surrounding area, local amenities, and school catchment regions.

    2. The need for finance and funding.

    With a clear understanding of your motivation, selecting viable properties to suit your needs is a relatively straightforward process. Securing finance is a far more challenging exercise, however, especially when you consider the fact that it will be subject to international laws and usually discussed in local currency terms. As a starting point, be sure to obtain an “Agreement in Principle” before confirming the purchase as this will safeguard you in the event that you are not extended a loan and enable you to reclaim your initial deposit.

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    3. Consider your tax liability as an investor.

    Everyone’s tax circumstances are different, and this is especially true in the diverse and changeable real estate market. Each nation will have its own unique body of tax laws and legislation, which may require you to repay costs such as stamp duty, title transfer tax or even inheritance tax at the point of purchase. Beyond this, some countries also require home-owners to pay land tax as a condition of their mortgage, and this is usually an annual cost that can eat into your capital. These potential costs must also be factored into your budget, as otherwise you may face significant legal penalties.

    4. Understand the value of local money and exchange rates.

    On a similar note, it is also worth understanding the value of local currency and any associated exchange rates. If you intend to bring money from your own country overseas at different junctures, you may also need to obtain a Certificate of Importation and open a local bank account. This makes it far easier to repay affiliated tax debts and legal fees on time, as you can quickly establish a series of standing orders to suit your requirements. If you are going to execute a smooth and trouble-free transaction, this should be considered a crucial part of your preparation.

    5. Obtain an independent valuation.

    If you were purchasing a home in the UK, you would not think twice about requesting a structural survey and an independent valuation. Many investors fail to do this when purchasing an international property, however, due to the cost and logistical challenges of organizing these tasks from a remote location. Obtaining an independent valuation and guaranteeing the integrity of the property is a fundamental part of any real estate transaction, however, and it is important to remember that any costs are a small price to pay to protect a larger investment.

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    6. Overcome the language barrier.

    Even if you do not intend to relocate permanently, you will still need to engage directly with international vendors and agents when purchasing property overseas. This may pose an issue with regard to any language barriers, which can easily create miscommunication and either delay completion of a deal or have a negative impact on cost. While you can overcome this by taking time to learn the relevant language, it is often far more tome-effective to employ the services of a legal professional with a knowledge of conveyancing.

    7. The need to confirm title and ownership.

    Given the remote nature of international real estate investment, it can be difficult to develop trust with vendors and agents. This means that you must be extremely cautious when discussing issues such as title and ownership, especially as any debt that exists on a property may be passed onto you once the transaction has been completed. If a developer has previously borrowed money to complete the work and not repaid this, for example, you may be liable for the repayment and any affiliated charges as the new owner.

    8. Research the location and local amenities.

    Even if you are comfortable with the financial and tax aspects of purchasing a property abroad, you must still conduct research into the location, its transport links, and local amenities. This is especially true if you intend to live there, although investors must also have knowledge of the region if they are to successfully let their property and generate a consistent return. When buying a holiday home for rental purposes, you must also be sure to research off-peak travel times as you may well experience a fall in demand and income during this period.

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    9. How will your safeguard your property when you are absent?

    If you are buying a holiday home or investing in real estate in order to make a profit, then there is no need to relocate permanently. This means that your property may well be empty for a significant portion of the calendar year, so you must be proactive and prepared to organize security year-round. One of the best ways to achieve this is to employ a local property management firm, who will make regular visits to check on the residence and organize any necessary cleaning or maintenance tasks. Although this will require additional investment, it can help to save you money and safeguard your assets.

    10. Do you have an exit strategy?

    Whether you intend to relocate internationally or develop a global real estate investment portfolio, it is important to remember that even the best laid plans occasionally go awry. You will therefore need a suitable contingency plan and exit strategy, as this will minimize any inconvenience caused and the potential for financial loss. For those hoping to relocate, it is therefore important to retain strong ties in your country of origin and ideally retain an existing property for a predetermined period of time. Investors will also need to keep a keen eye on the global real estate market and prevailing economic trends, as these factors may dictate the need to sell or change strategy.

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    Last Updated on July 20, 2021

    Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

    Financial Freedom is Not a Fantasy: 9 Secrets to Get You There
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    Have you ever considered your life now, and how it would be if you had more time to spend with your family and less worries about money?

    Nowadays, financial stress is one of the most troublesome weights in life. If you’ve ever encountered financial stress, you know the difficulty of not having enough income to pay your obligations or bills.

    Many people say that money is not the ultimate goal of life. While that’s true, money certainly plays a very significant role. The meaning of financial freedom changes with the different phases of our life, but ultimately, it is something that many people strive for.

    In this article, we’ll explain how to capture that financial freedom you’ve been looking for. Read on to learn the secrets to financial freedom.

    Break Free of Your Finances

    Financial freedom is about having a constant flow of cash from your assets to cover all your regular needs.

    When you are not worried about your income, or living paycheck to paycheck, you gain a great sense of freedom. It’s the freedom to be obtain and do what you truly need to make your way through everyday life.

    Gaining financial freedom, though, is a process of growth, making small improvements and gaining emotional strength.

    Though it seems hard to believe, it is really very simple to get financial freedom.

    To do so, you simply need to make sure that your assets exceed your liabilities. In other words, you’ll need to find the sweet-spot where your residuals meet or surpass your expenses. This is something that you can achieve with the proper plan.

    While not every person will accomplish financial freedom, the potential for anyone to do so is certainly there. Anyone can achieve this success, regardless of their income level.

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    Outlined below are 9 secrets that will help you in your goals of achieving financial freedom.

    1. Stop Unnecessary Spending

    We often spend money inwardly, instead of objectively.

    For example, you may spend when you’re anxious, depressed, restless, exhausted, from fear of missing out, or to please others. This is a very unhealthy way to handle your finances.

    To stop this habitual spending, log down all your spending over the course of a month.

    Just as some people keep a food diary, keep an expense diary. Remember not to just write down how much and what you spent the money on, also include the circumstances of why you spent the money. Was it an impulse buy at the checkout line or was it something you planned to purchase?

    This increased self-awareness could enable you to avoid triggering situations in the future when you are considering an impulse buy.

    2. Plan a Monthly Budget

    This is a great opportunity to get serious.

    Take a seat with your spouse or partner and make a monthly budget based on your income, not your expenses. You are never again going to spend more cash then you have on hand.

    Overspending is the thing that led you to more financial obligations. Make sure you decide every month what is coming in and what will be going out and stick to that budget… no matter what.

    3. Cut-up Credit Cards

    Perhaps you are the type of person who always pays your credit card balance in full before the end of your billing cycle, and enjoys the reward points you gain. If this is the case, then you’re already way ahead of the game.

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    If not, you may want to consider ridding your life of the burden that credit cards bring.

    Many cards have strategies set up so that if you make a certain number of late payments, they will raise your interest rate much higher. This can really add up in the long run and you won’t be doing your financial situation any favors. If you’re prone to late payments or have a large balance due on your cards, cut them up!

    Without proper self control on credit card spending and payments, you are basically throwing your money away. To ensure that you have better control over your spending, use only cash or debit for all future purchases (and don’t forget to pay at least your minimum payment on your cut-up cards each month!).

    4. Increase Savings

    There is no doubt that for a comfortable retirement you must accumulate satisfactory savings throughout your working life.

    It’s good practice to save up to 15% of your income.

    Start with your workplace 401(k), if you have one. If not, a Roth IRA (if you are eligible) or a traditional IRA (if you are not eligible for the Roth) are the next logical steps.

    Increase in longevity means you might be able to look forward to 25 to 30 years in retirement, or possibly even significantly more. Investing now in good retirement plans will ensure that you have a guaranteed a stable monthly income when the time comes to stop working. [1]

    5. Invest Wisely

    Consider investing in funds.

    Specifically, you will gain higher returns if you invest in different types of mutual funds such as Debt funds, Equity funds and Hybrid funds with a proper balance, although it absolutely relies on your personal preferences and sense of risk taking.

    To get the most of these benefits, make sure you are investing in a variety of assets. Another resource of investing in mutual funds is SIP (Systematic Investment Plan) where you invest some money every month in funds. SIP works by averaging the per unit price of the stock.

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    Mutual fund investors are aware of the benefits of an SIP (Systematic Investment Plan). For one, it is the most secure way to invest in equity mutual plans so that wealth is created over a long period of time. This plan also helps you to gain a better sense of financial discipline, which will come in handy in all your financial endeavors.

    6. Invest in Gold

    There isn’t really a better way to invest in gold than to have the physical gold itself in your possession.

    You can purchase gold coins and bars from mints as well as from coin dealers and other private sellers.

    Another way to invest in gold is through ETFs (Exchange Traded Funds).

    These are is similar to mutual funds but they are exclusively investments of gold. ETFs are great because they offer more liquidity; the ETF owns the actual physical gold, stores it, and retains the value of the shares. These shares can then be bought and sold in the stock market, and one big benefit is that the transaction costs of gold ETFs are much lower than the that of physical gold.

    With its consistently-increasing demand, investment in gold can be very wise long-term investment to make.

    7. Stash Emergency Funds

    Whether it’s a cash gift or a work bonus, always try to save any extra money that comes your way rather than making unneeded purchases.

    If you get paid every other week, you’ll get an “extra” paycheck (three rather than the usual two) twice a year. Either save those paychecks towards your emergency funds or utilize the money to pay down other obligations, such as loans, credit cards or other debts.

    Make it hard to get your cash.

    Put your savings in an alternate bank, maybe an online bank that forces you to delay for several business days before transferred money hits your regular bank account.

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    8. Find Fabulous Mentors

    Find a mentor, such as a friend or family member, who has exceptional control over their finances and pay attention to everything they do.

    If you do not have any friends or family that are enjoying financial freedom, then find a mentor online! There are numerous blogs and guru websites featuring the advice of many people who have reached financial freedom, and they exist primarily to let you in on how to achieve it for yourself.

    There are also plentiful forums available that share tips and tricks on how to best achieve financial freedom. Read as much as you can and start changing your habits for the better.

    9. Be Extra Patient

    Patience is the key of financial success.

    Being patient can be quite tough, especially when you’re struggling with your finances, but having faith is worth it. You’ll continuously be on the right track if you are taking the proper steps above.

    So don’t be discouraged, even if you are only saving a few dollars a month; it all adds up. Within just a few years you’ll look back proudly at your accomplishments and be glad that you had the patience to get there.

    Financial Freedom for All

    Anyone can achieve financial freedom, regardless of their financial circumstance.

    Use the tips provided above to get yourself on the track to financial freedom and toss your monetary concerns out the window. If you wish to achieve a life with financial freedom for yourself and your family then you must adopt a disciplined approach towards your finances.

    Following the simple secrets above is a great start to making your money work for you, so you can work less and live more!

    Featured photo credit: rawpixel via unsplash.com

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    Reference

    [1] Hartford Gold Group: IRA Retirement Accounts

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