Where to Invest?
Buying property abroad for investment is no longer solely for the rich, and the Telegraph’s list of the top 20 places to invest ranges from Japan to Zell am See, Austria. There are possibilities all over the world, so what should UK investors be aware of?
The most popular type of investment is the buy-to-let holiday property, which brings in a regular stream of income if all goes well, but beware there can be pitfalls. Many booming holiday economies, whether from corruption or over-eagerness, have lax regulations on holiday builds, and booming economies can also bust. See our advice on foreign banking.
Letting Your Property
It’s also easy to overlook the fact that many holiday destinations have off-seasons when you’re lucky to get any income, while still having all the costs. This can apply even to tropical paradises, which may have monsoons or hurricane seasons, so it’s vital to know all the facts about the location before making a decision.
As Which? explains, you also need to make sure the property is accessible and has attractive amenities close by, as well as using official reports to check what rents are being charged for comparable properties.
The same priciples apply for property lets in the UK
Letting and marketing the property are hard work and one option is to put everything into the hands of a local estate agent. Alternatively, you could invest a managed property, where marketing and management for an apartment building is in the hands of the building’s owner, and the individual apartment owners have minimal responsibilities. Both options involve a fee, but could be cheaper in the long run. Read our UK Banking Guide.
It’s vital to get independent advice about both the property itself and the best way of financing it. You might be better seeking a mortgage in the UK, to protect yourself against currency fluctuations. On the other hand, there are advantages in financing the purchase locally, if all transactions are going to be in a major currency like the euro or the US dollar.
We recommend talking to a specialist property lender about funding your property development or renovation. Find out if you qualify for property finance here.
And finally, remember to factor in all ongoing costs, such as maintenance and repairs.
Get your taxes in order with a licensed chartered accountant who specialises in property income. We also recommend taking out insurance to cover all eventualities and provide you with some security. Click here to find out more.