10 common mistakes people make when buying a property abroad
10 common mistakes people make when buying a property abroad.
1. Not profiling your property.
How will you use the property? Is it a second home? Is it for your retirement? Or is it an investment vehicle, or purely for rental? You need to decide this before you start searching. Otherwise, you risk falling for an attractive property, that’s completely unsuited to your needs.
2. Not choosing the right location.
This is a key factor when choosing any property and should fit with your property profile of how you will use the property. For short-term rentals, choose locations with high visitor. With a second-home or retirement property, you have far more flexibility.
3. Not choosing the right property.
This also takes you back to profiling yourself properly. Buying a 300-square-foot city apartment could maximise your rental yield…but you probably wouldn’t want to live in one all year-round. Which is why it is vital that you buy a property that works for you…. that makes a comfortable second home, or that gives you a good rental yield, or that offers the best potential appreciation.
4. Not employing the services of an Independent Lawyer.
We really can’t say this often enough. No matter what anybody tells you, always use an independent lawyer to represent you throughout the purchase of your property overseas.
5. Not carrying out your own due diligence.
You’d do this at home…and you should to do it abroad.
6. Not paying the true market value.
Don’t take a seller’s or estate agent’s word that you are getting your money’s worth. Do your own research. Checking for accurate market comparisons or getting independent advice is always a good option.
7. Not doing the maths.
Works out all the costs, not just the purchase price, calculate the total costs including any local taxes. In a private community, find out what your monthly fees are. For a rental property, check out furnishing costs and property management fees. If you have a mortgage or other financing on the property, work out your total monthly payments.
8. Not ensuring you can do what you want.
If you buy a property for rental, make sure you’re allowed to rent it on your terms. Can you sell the property freely, to any buyer? If buying pre-construction, can you sell before completion? Not all developers allow for this to happen.
9. Not checking out the developer.
When buying off plan, make sure that the developer is reputable and has the financial backing in place to finish the project and deliver what has been promised.
10. Not viewing it yourself.
This is crucial. Don’t rely on advertising, the word of the seller, glossy sales brochures, or dreamy photos. Always go out on a viewing trip and see the location, and your chosen property, in person.