Thinking Of Buying A House Abroad?

Buying a house abroad has become very popular in recent years. Whether buying for long or short term investment, for holiday letting, a business or a change in lifestyle, buying an overseas property could provide the ideal solution.

But, what sort of property is right for you and where should you buy?

We recommend you are clear on your reasons for buying abroad before you start looking as these will dictate where and what sort of property you should consider. Try the following questions to help you clarify your reasons for taking this step.

Reasons For Buying A House Abroad

1. What do you want from this property?

A regular income from letting the property? A short term return on your investment? A long term return on your investment? For retirement? A place to take your holidays? A permanent residence? This is the most important point to consider because your objective for buying will influence the next question.

2. Where should you buy?

If you require a regular income from letting the property you should look at locations with a good track record of demand. You might consider speculating on an up and coming area but bear in mind it could take time to provide a regular income. Places such as Spain and Portugal are usually a safe bet. If you are looking for a short term return on your investment buying off-plan is one of the best ways to make a quick return. Buying 'off plan' is buying a property before it is built. You buy often at a reduced rate due to incentives from the developer keen to sell. You then sell it on after completion often at a good return in a short space of time. A good property agent will offer you advice on the best options available. If the property is to provide a long term return on your investment you have more options. As with any investment you have to decide how much risk you are prepared to take. For example, Spain is probably one of the safest countries to buy due to demand, but the return may not be as much as an up and coming area such as Egypt or an, as yet, 'undiscovered paradise'. If this is to be a holiday home for you then it's really quite obvious it should be somewhere you like! Keep in mind that you will be returning on a regular basis so the cost of flights should be included in your budget. If the property is to be your permanent residence choose a location you are already familiar with and can speak the language with some confidence, or be prepared to take language lessons. Also consider the distance and ease of travel for family and friends who will want to keep in touch - and get a cheap holiday at the same time! Note: Whatever your reasons for buying, check the inheritance and tax laws of the country you are buying as this will impact on what you get back from your property. Some of the up and coming areas such as Morrocco often offer tax incentives to buy in order to kick start their markets.

Should you go on a 'free' property inspection trip?

Is Dominican Republic Property The Hot Tip For 2008?

3. How Much Can You Afford To Spend?

The best answer is only what you can afford. Yes it sounds obvious but it can be tempting to go over budget for the dream home. Buying a house anywhere in the world is a risk. Invariably property does increase in value but economic cycles and 'market corrections' will have an impact on your investment. This is not such an issue for a long term investment but vital if you are looking for short term gains. This is where find a reputable overseas property company, agent or consultant is vital. They'll be able to offer you advice on how to best achieve your objectives. Also note a good agent or company will never encourage you to go over your budget. Depending on the country you are buying your property you may need a certain type of mortgage if appropriate. In some you can borrow from a UK company and for others it would be better to use a lender based in the country you are buying. For more information see our guide on getting a mortgage for an overseas property. Also see our advice on how to find an overseas property company.

Overseas Property And Tax

Whether investing, renting or living abroad the 'taxman' will want to know. As with any tax issue it's complicated, and at times, a baffling process. For impartial, expect advice on tax issues and living abroad we recommend the excellent guides from Tax Cafe, titles include:-

Non Resident and Offshore Tax Planning

How to Profit from Off-Plan Property

Property Capital Gains Tax Calculator

Or click here to see all their guides.