We’re living in a global age where the economics of countries far beyond our borders have an effect on what happens in the UK. With that in mind, property investors should broaden their horizons. National boundaries should be no barrier when it comes to potential investments.
There are, however, factors that must be weighed up when it comes to thinking of purchasing a foreign property and these must be compared to the strengths and weaknesses of buying at home.
Location
Let’s be honest, there are some things that buying a home in dear old Blighty simply cannot deliver. If you want a guaranteed getaway in sunnier climes and a tropical beach view then, with the best will in the world, you’ll need to go overseas. If all you need is a quiet retreat to get away from treadmill of working life, however, the UK has plenty to offer. An overseas purchase should be made for a property that simply cannot be bought in this country.
Exchange rate
As the average price of a property creeps up in the UK – and London especially – you might well be able to get more for your money overseas. The pound’s strength against the Euro, for example, could be an important factor. The exchange rate is now almost on a par with the level ten years ago. Small changes in the rate can make a big difference, with £100,000 now worth tens of thousands of Euros more than when the currencies reached near-parity in late 2008/early 2009, making a strong case for an investment on the continent.
Knowledge
It’s never a good idea to invest in any property without a thorough knowledge of the market you are investing in. This is no different when shopping overseas. Ideally you’d look to invest in a foreign country that you know a fair amount about before you begin – maybe a favoured holiday destination or a regular business location. You will still need to employ the services of a translator and legal expert who understands local laws and customs – trying to ‘wing it’ with the basics won’t do when it comes to the serious business of a house sale – but having some knowledge to start off with will at least help you to avoid getting caught out.
Property is key
It’s important not to lose sight of the property in this discussion. This has to be right whether you invest at home or abroad. There’s nothing wrong with having your head turned by the sort of stunning property on FT Property Listings – provided you then do the necessary research required to make that dream home a reality.
If you can find the right property in the right location at the right price then it’s well worth investing in it. That’s the case whether that property happens to be in the next street or thousands of miles away. Buying overseas is certainly an option for a property investor, especially in a country where the exchange rate and economic conditions are favourable and where the natural conditions create settings that are simply not found at home.
