Consumer group, Which?, has published a new book called Buying Property Abroad to help you buy a place in the sun without suffering legal and financial nightmares.
“The TV shows that have helped fuel our obsession with overseas property make buying abroad look easy,” says author of the book, Jeremy Davies. “But in reality finding, purchasing and owning overseas can be a time-consuming business, and turning a foreign property into a successful investment can be even more of a struggle.”
The book aims to guide you through the legal, financial and practical aspects of living abroad whether you’re planning on fulfilling a long-held dream or making a hard-headed investment decision. It clearly explains how the buying process differs from the UK, covering contracts, searches, surveys and deeds. Mortgages, currency deals, taxes, fees and duties are also covered.
“Get all this right and you could have a wonderful new asset which gives you and your family enormous enjoyment over the years, and greater wealth in the long run. Get it wrong and you could be risking a good chunk of your future security on a pipe dream.”
Here’s Which?’s Top Ten Pitfalls When Buying Property Abroad
1. Overstretching your finances
It’s easy to feel left out if you don’t have a fabulous second home somewhere. But don’t jump on the bandwagon unless you’re sure why youre doing it, and that you can afford it - especially if you’re securing it against your UK home.
2. Buying sight unseen
If you buy an overseas property without ever having seen it - and surprising numbers of people do - you’ve only got yourself to blame if it ends up being a disaster.
3. Buying without a lawyer
Lawyers may seem to make the process complicated, but the work they do is vital to protect your best interests - for example telling you whether the seller has the legal right to sell. Pay extra for one who speaks good English and is qualified in UK and foreign law.
4. Failing to check credentials
Is the seller really the property owner? Is your estate agent really a qualified agent, and are they bonded to hold a deposit on your behalf? What guarantees are there if the developer goes bust?
5. Putting down the deposit too early
Don’t assume that your deposit is returnable, even if it is described as a ‘reservation’ deposit. In most countries paying a deposit commits you to the purchase, so don’t hand over any money - even to a third party - unless you are sure you want to buy.
6. Choosing on the basis of price
It may be tempting to buy a property for the price of a second hand car, but perhaps the reason it’s so cheap is that nobody else wants it.
7. Ignoring the ongoing costs
Even if you hardly use it, keeping an overseas property ticking over costs money. Insurance, maintenance, property management fees, service charges and taxes all add up, so work all this out in advance.
8. Relying on budget airlines
Cheap flights have opened up huge tracts of Europe to property hunters, but don’t assume they will always be there. Ask yourself what would happen to your tourist rentals if routes to the little local airport disappeared.
9. Doing things on the cheap
If you want to avoid creating a white elephant, don’t cut corners when renovating. If you can’t afford the architects, surveyors and craftspeople to bring out your property’s potential, look for a different one.
10. Forgetting your heirs
If you want control over how your overseas property is dealt with on your death - and thus avoid the restrictive inheritance rules in place in many foreign countries - you need to make a will. You may even need to make two - one here, and one there.
Buying Property Abroad is available online from amazon.co.uk for £7.25
