Buying investment property abroad is becoming more and more popular, not only because of the attraction of a warmer climate but because of the affordable prices in investment opportunities available.
The changes to the pension rules this year which allows individuals access to their pension savings from age 55 will undoubtedly see many invest in second homes overseas. Some might realise that investment property abroad can provide not only great holiday in the sun (or snow) but a steady income too.
Choosing the right location
The first issues to consider when buying a property investment abroad are which country to invest in and what type of property is desired. Many people find a property to invest in whilst they are aboard visiting the country.
A good way to buy properties cheaply with a view to holding them for medium to long-term capital growth is to explore new emerging countries
In 2004 I did just that. I invested in two off plan apartments in Cyprus (South).
Before taking an investment in a property abroad you do need to consider the following:
Where within that country do you want your property to be located?
Do you want to holiday in the same location and property every year?
How is the chosen location different in the winter and off peak seasons?
How close is the nearest airport to the property?
How good is the local transport system?
What the tax implications for you in the chosen country?
How good are the local social and health services?
What is the education system like?
How stable is the economy and exchange rate?
Look into all the hidden costs?
Make sure you have an exit strategy.
In my experience, by the time the apartments were due to be completed, developers had over built in the area; there were so many blocks of apartments that the market was saturated. It would have been a struggle to let them out to locals let alone holiday makers.
A good tip if you are buying property that is within a tourist area, is go for as high a specification as you can afford. If budget is limited, it is better to go for a smaller, more luxurious property than larger property that has a low standard of finish.
I was fortunate to part exchange my two apartments with another developer and bought a villa off-plan and had it built.
Investing abroad is not for the faint hearted and thorough research of the markets should be done before parting with any hard earned cash. A sensible long-term plan should be in place to benefit from maximum capital growth however, you can never be absolutely sure of the market and you will have no control over that country’s ongoing economic climate.
Here are some pictures of my four bed, four bath villa in the beautiful hills overlooking Paphos