Should I Invest In Property Abroad?

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We all know there’s plenty of money in property. In fact, many of us have made our fortune on the housing market. House prices tend to rise with inflation over time. That means the value of your property goes with it. Of course, there are have been some turbulent years of late, but the general consensus shows we’re back on track. With that in mind, lots of readers are asking us if it’s worth investing in the property market again. More specifically, many of you are asking if it’s worth investing abroad.

With current fluctuations in the Euro (as a result of the Greek crisis), it makes for an interesting financial period. The Euro is comparatively low, and house prices have come down somewhat as a byproduct. The question is whether the Euro will recover, or if it’s now stuck in a rut. However you look at it, there are certainly a lot of eyes on the continental real estate market. With low prices, buyers expect to make a tidy profit. But, before you sink your life savings into a mortgage in Spain or France, here are some questions you should ask yourself.

Why are you buying?

Different buyers have different motives. And each of those motives requires a different strategy or plan. If you’re looking abroad for a simple change of location, then you needn’t worry too much about the markets. If you’re looking for a long-term home abroad, you need only worry about how hot the temperature is! However, if you’re thinking more in terms of investment and return, you need to take stock of other factors. The same is true if you’ve got your eye on the rental market. If you’re buying to let, then lots of new factors creep in.

How are the currency markets responding?

Buying a house is difficult enough in the domestic market. House prices fluctuate, and the budgets are constantly analysed. When buying abroad, you must also throw currency exchange rates into the mix. We’ve already discussed this briefly, but exchange rates alter the value of property in a big way. You may agree a price within your budget, then witness a 10% rise in exchange rates. This could crush your budget. Take regular stock of the Forex markets, and try to secure the exchange at the right moment.

Do you know the foreign market and culture?

Buying a house relies on one important priority: location. Understanding the location of your property is the key to building equity. You need to know whether the area is likely to increase or decrease in value. You need to know the facilities and amenities nearby. Spend some time in the country and the local area. Meet the local real estate agents, and get a feel for the property market in that country. Every country has their own unique buying culture.

Do the numbers add up?

As with any property purchase, always do your sums, and set a strict budget. Only, this time, you’ll need to consider plenty of flights to the location. There are also transport plans and storage charges if you’re moving furniture over. Consider every small angle before you commit.

Buying property abroad is a great investment if you get the timing right. You can take advantage of fluctuating currency markets, and secure your place in the sun!

 

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