Looking to add to your property portfolio? Why place a limit on your ambitions? Some of the very best property listings that you’ll come across are for homes overseas, so why not consider branching out?
Don’t dismiss a foreign property investment out of hand – weigh up the pros and cons and see if it’s something you can reap the benefit from…
For
Unique
The best property portfolios are varied and take advantage of opportunities all different sections of the market. Sometimes foreign countries are able to offer things that the dear old UK simply can’t. If a Texan ranch, bountiful vineyard or idyllic island getaway are on your shopping list, for example, you’ll have no choice but to look abroad. This can be telling if you’re on the lookout for the ‘property of your dreams’ or if you want to purchase somewhere that will command a good income from tourists.
Value
The UK property market is competitive and, in many areas, expensive. The strength of the Pound now means that homes in the Eurozone, for example, are much better value for money than they were five years ago. In countries such as Spain a sluggish domestic economy has kept prices low, meaning there is great value for the UK investor in a country that is traditionally popular with Brits.
Returns
Value isn’t the only positive factor to be found overseas. Several markets have the potential to deliver highly lucrative returns. Turkish properties, for example, have jumped 18 per cent in value in the past year, beaten only by Hong Kong – where space is at a premium just like the prices.
Against
Knowledge barrier
Many UK investors would accept that the language barrier is a factor to be considered when moving to a new country. Yet it’s not only the language that can be tough to understand. Different customs and tax rules exist in different countries and it’s vital not to be caught out by the laws in the country you are investing in – one slip up could be very costly.
Management
It can be tough enough trying to manage any property, let alone one that is a plane journey away. Of course you will pay for your properties to be maintained, but there may well be times when you need to deal with matters in person.
Uncertainty
When you invest in a property overseas you’re not just picking a house, you’re also picking a country that you think will make a sound investment. A series of tough-to-predict social, political and economic factors could knock thousands off the value of even the most luxurious of properties. The UK, for its faults, at least has stable conditions in which to operate.
In the end an investor has to come up with their own judgement as to whether they want to purchase a property abroad. Many of the negatives can be overcome if time is taken to conduct thorough research – and if expert local knowledge is sought out. The benefits to be had from picking up a high-class property that is unique to one geographical location are many. By putting in the work required, you can sidestep the potential pitfalls and reap great rewards.