How and Why to Invest in Overseas Property
Why Should You Invest in Overseas Property?
There’s less uncertainty
The UK property market is currently undergoing some uncertainty at present, especially with Brexit negotiations looming large. As such, some investors are looking further afield for investment opportunities, and there are several appealing options abroad.
It’s a chance to diversify
As any savvy investor will testify, it’s not a good idea to ‘put all your eggs into one basket’. Investing in property abroad is an excellent way to broaden your portfolio and cover yourself financially in the future.
It offers great returns
There are many upcoming areas abroad, which are currently cheap to invest in, and look set to enjoy solid capital growth over the next few years. Buy in a place like this, and you’ll enjoy excellent ROI as a result.
How to Invest
Here’s a brief run-through of what you’ll need to consider before investing abroad.
Research the market
Some locations will be more lucrative than others, and it’s important to have a good grasp of the local market before you commit. Find out how much property prices have risen in the last few years, and whether or not this trend looks set to continue. It’s also worthwhile discovering what the average rental yields are like.
Know the law
Legalities differ from country to country; and regulations are likely to be different than in the UK, not to mention tax systems. It’s imperative to know how much you’ll be charged if you invest there, plus what laws you need to abide by.
Who are you targeting?
Know your target demographic before you start searching the market. For example, if you’re planning to rent out to British holidaymakers, what sort of property appeals to them? Which locations are they most likely to want to visit, and can they reach the home easily from the airport? Alternatively, if you want to rent to a local resident, you’ll need to search for properties that are near towns or cities, and not too far from transport links and local amenities.
Will you be using a letting agent?
It’s a wise move to hire a local letting agent to manage your property; unless you plan on visiting the country on a regular basis. Although a letting agent will eat into your profits, they usually offer value for money; dealing with any problems if they arise, plus helping you to find tenants and holidaymakers for your property.
Do you want to use the house yourself?
If you’re planning to use the property as a holiday home, you’ll need to strike a balance between what is rentable, and what appeals to you personally. Remember, if you’re relying on the house to generate an income, it’s important to consider the tenant first and foremost, or risk investing in a property that no-one wants to stay in but you.
With great thanks to Daniel Nicolas, Marketing Manager at FJP Investments.
