Recent property statistics confirm that Brits just cannot get enough of overseas property. Figures released by the Association of International Property Professionals (AIPP) claim that in 2007, the British spent a staggering £246 billion on homes abroad, a 21% increase on 2006.
Spain still tops the favourite destination chart – Spanish homes accounted for over a quarter of all purchases – but newer markets are fast emerging as investor favourites. According to a survey carried out by property investment company, Obelisk, Bulgaria, Turkey and Romania head the list of preferred countries for investment in bricks and mortar.
Savvy investors have seen high capital growth and strong rental yields in their property investments, but this is by no means always the case. Media reports continually highlight the flip side to property investment and horror stories involving purchases abroad appear almost daily.
Overseas property investment is not something to be taken lightly, but there are certain steps you can take to ensure that investment in a home overseas does not end in tears. By applying a combination of thorough research, due diligence and canny financing, buying a property abroad should have a happy ending.
Research holds the key to success. Only careful analysis of the myriad of factors involved in a purchase means you can be sure of walking into an investment with your eyes wide open. Aspects such as the local and national economy, the tourist industry and property market history are all essential when it comes to making an investment decision.
At Obelisk, a world leader in overseas property investment, they take their research very seriously. “We believe that an investor should only commit to a purchase when they have enough information to base their decision on” advises James Gonzalez, Market Analyst at Obelisk. “Our comprehensive in-house research and analysis ensures our clients receive the most secure investment opportunities.”
Hand in hand with exhaustive research should be due diligence. This means you avoid falling victim to a property with no planning permission or to a developer going bankrupt. It also ensures you get what you paid for. “One of the main pitfalls of property investment is lack of financial and legal security” warns James. “At Obelisk, no project is released unless it has met our compulsory due diligence criteria.”
Following research and due diligence, careful financial planning, guided by experts, makes the difference between laughing or crying all the way to the bank. Remortgaging your current property is often the easiest way to become a cash buyer, but taking out a mortgage on your investment property may cost you less. However, you need to consider the fees and costs involved throughout the process to make sure you incur minimum costs but achieve maximum gain.
Ken Thorkildsen, Director of Obelisk Private Finance, adds, “The number of mortgage products available abroad is increasing for non-resident property buyers. But in order to secure the best solution at the most competitive rates, it is essential to seek the advice of overseas finance specialists. At Obelisk Private Finance, we source only the most competitive products from those available in countries throughout the world.”
If you are among the thousands of British owners of properties abroad or planning to join them, apply the tried and tested formula of research, due diligence and wise financing. Then write your own happy ending.