Seanest - Jan Van Parijs Properties

The ultimate checklist for buying property abroad.

The trick to buying property abroad and becoming a successful investor is learning how to calculate investment risk. Before embarking on buying that dream villa or lock-up-and-go apartment, you need to think about your immediate needs and future financial obligations. With any financial endeavour, it’s important to set goals and balance your dreams and expectations with reality.

 

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The trick to buying property abroad and becoming a successful investor is learning how to calculate investment risk. Before embarking on buying that dream villa or lock-up-and-go apartment, you need to think about your immediate needs and future financial obligations. With any financial endeavour, it’s important to set goals and balance your dreams and expectations with reality.

Once you’re up to speed with your current financial status and have a sound understanding of the foreign investment market, you’ll be able to plan well and make safe and informed investment choices. It’s necessary to understand all the risks and rewards associated with investing in foreign property, as well as have a clear goal and investment purpose.

Buying property abroad can be a rewarding long-term investment if you have the know-how. Even if you’re confident about your intended investment choice, you should always do final checks on the following to ascertain you’re making the wisest choice:

 

Know your Budget

 

We can’t emphasise this enough. It’s vital to do a quick assessment of your financial status. What obligations do you have and are you able to meet them after making your investment? You must be realistic with your budget. Private sellers and agents will always try to sell properties at the highest price possible. Don’t be fooled – it’s easy to get carried away in the moment, especially if you really like property. If it’s more than you can really afford, then you need to decide if you’re making a healthy financial decision.

It’s also important to think about a home’s potential resale value in comparison to the amount you’re able to lease the property for. Learning how best to evaluate a property’s resale or rental value is crucial to ensuring a good return on real estate investment. Keep in mind that when buying property abroad, you also need to factor expenses related to tax and legal procedures, as well as knowing what to expect if you’re leasing your property.

 

Maintenance

 

Do you know how much it costs to maintain the property? Sure, you might be eyeing a beautiful old villa with lots of character, but are you able to afford its upkeep? If you’re leasing a villa with a large garden, you will need to employ garden services to keep everything tidy. On the other hand, investing in a bungalow-style apartment might mean less rental income, because the property is smaller, but you probably won’t have to spend a great deal of cash on its upkeep. While leasing property is a smart way to help pay your mortgage, it still requires a degree of management and admin.

 

Target Suitable Tenants

 

One mistake that potential buyers make when buying property abroad is not paying enough detail to the kinds of tenants they want to attract. It’s a common rule-of-thumb that you should always choose a property that appeals to tenants who suit your needs. A young bachelor and family’s living needs and budget are most likely going to be very different.

Do you want to lease to holidaymakers, young professionals, or families? Tourists will typically want to be near local attractions, families will want nearby schools, and young professionals might prefer the city centre. Make sure that you keep your ideal tenants in mind when looking to invest in real estate.

 

Don’t Forget About Tax

 

Know the law when it comes to tax before you sign on the dotted line. Investment properties offer some valuable benefits, but they can also come with unexpected costs. Buying property abroad comes with an array of different tax legislations. For example, in Spain legislation can differ between provinces. The last thing you want is to land up owing more money than you bargained for, because you overlooked the intricacies of local tax. Seeking out professional advice might seem pricey, but it can save you loads of money in the long run.

Tax considerations, defining potential tenants, sticking to your budget and factoring in property maintenance are some of the most important things you need to think about when it comes to investing in real estate.

We recommend downloading our ebook, The Retiree’s Guide to Investing in Property, for a comprehensive overview to help you make intelligent investment choices. If you’re already looking to enjoy your retirement by living large, then why not take a look at our Villas in Calpe. They make beautiful retirement homes and offer lucrative rental income.

 

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