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A Guide to Buying Overseas Property
The motivations for buying overseas property can vary considerably, although one common reason is that it could seem undervalued and therefore likely to appreciate in future. For example, if your local currency is particularly strong relative to that of a foreign country, the cost of buying overseas property can seem especially inexpensive, and could present a lucrative real estate investment opportunity over the long term.
Regardless of why you are interested in buying overseas property, the following sections offer helpful suggestions that can make your purchase more successful.
Research the market thoroughly
Just as with any substantial long term investment, you should research a foreign real estate market thoroughly before buying a property in that locale.
Different property markets can be in different stages of the property price cycle, so you should find out how prices have behaved over the last five to ten years. For example, a trend of rising property prices in Australia does not mean that real estate values are also trending higher in the UK.
Furthermore, some legal restrictions may apply to your ownership of foreign property. Accordingly, in order to avoid fraudulent or disappointing deals, you will need to make sure that you can hold title in a way that makes you feel secure before you hand over any funds.
Retain an independent lawyer to represent your best interests
While most local real estate transactions do not involve a lawyer, it can really make sense to hire an experienced, professional and independent legal representative to look out for your interests when buying overseas property.
Also, make sure that you clearly understand all legal documents pertaining to the transaction before you sign them. You might also need to hire a translator if such documents are written in a language you do not thoroughly understand.
Buy through a reputable real estate agent or developer
You might be able to make a successful foreign real estate purchase directly from an owner. Nevertheless, if you do not understand the overseas market thoroughly, it would make sense to buy property only via a real estate agent or developer with a good reputation and references.
They can often help you avoid costly pitfalls and are typically motivated to facilitate the transaction to your satisfaction.
Save money on mortgage payments and currency transfers
Those who do eventually decide to buy overseas property will need to make appropriate arrangements for paying for it in the relevant foreign currency. Check the current exchange rate with an online currency converter.
No matter whether this payment will be done in a large lump sum, or in a succession of regular mortgage payments, the purchase will very likely involve some form of foreign exchange transaction.
A better solution than approaching local banks — which often provide meagre foreign exchange services and charge very wide dealing spreads — would be to exchange your funds using a regular payments service, like that offered by OzForex.