Have you always dreamt of owning your own piece of land on the other side of the world? A French farm house in the Provence, or perhaps it’s a rustic villa in Tuscany that gets your heart racing?
Developing property abroad has become increasingly popular in Australia over the last decade. But as Gary McCausland shows us on Buying Property Abroad, there’s plenty to consider before jumping into an overseas market.
Chris Hare from Australian Property Wealth Strategists (www.apws.net.au) tells us how to get started.
Every country has it’s own laws when it comes to buying and selling property – from tax liabilities to land lord obligations, so be sure you understand the financing and negotiating processes involved.
“Local laws of buying property can be treacherous and you need to look into the simple aspects of buying property - tax treaties with Australia, ease to repatriate your monies - all of this must be understood before deciding if a region or country is the right place to invest your money,” says Chris.
Finding a good property solicitor is vital when seriously considering investing in property out of Australia. Not only will they be able to help you gain a thorough understanding of the legals involved, they’ll also be able to seal the deal relatively hiccup-free. Look for someone who has experience in the area and is familiar with regulations and procedures involved (Property expert). Hiring someone who is fluent in the native tongue of your country of choice will also help for obvious reasons. “A wider team of professionals is important to ensure full and complete support in your decision making and the ongoing preservation of your investment,” says Chris. “You need to secure the services of a property manager, insurance broker, accountant (native), house inspector, independent Appraiser.”
Consider arranging finance with a large Australian bank. Most have overseas partnerships that will help you organise your investment abroad. It’s a good idea to organise a meeting with a specialist at your local branch to talk through all the paperwork involved and just what is required from you. They’ll also be able to fill you in on exchange rates – a big factor in overseas developing.
“Timing of exchange rate can have a significant impact on an investment both positive and negative, so try and understand the direction of the two currencies and even buy ahead to minimise risk,” Chris adds.
No matter how great your knowledge on the Aussie property market, it’s important you research the market of the country you’re considering investing in as it can differ greatly from home. For example, what you might consider to be a steal may seem heavily inflated to locals.
Chris says sometimes developing abroad can be “too easy” – and it’s easy enough to get stuck if you haven’t done your research.
“You need to be confident of seeing a positive return,” says Chris. “The right location and sound investment base is where professional expertise can be worth its weight in gold – a professional consultant that knows the country or region is reputable.”
Remember, while having someone on hand for local advice is imperative, the best way to research the local market thoroughly is by spending a decent amount of time in the country – and your preferred suburb – yourself.
Chris also recommends you head online for more research. “Online forums will give you a feel for what is happening and where. But be aware not all this information maybe what it seems, it is an indicator, comments and not always fact!”
CHRIS’ TOP TIPS:
- Get professional help and support to guide you through and alleviate issues.
- Ensure location, along with metrics, are in good shape.
- Look at the demand for investment property in the area (tenants).
- Ensure there is more than one industry that maintains the local economy along with good and sustained investment into the infrastructure of the area.
- Your investment must yield a strong return (yield and potential asset appreciation).
- Always look to minimise risk, do not go herding with the pack – take your time and do your homework!
- Be wary of title (deeds) ensuring its free from ANY claim, tax laws, ownership vs selling (how you get your money out) and and how the local tax office and ATO view the development in terms of tax efficiency
Don’t forget to tune in to Buying Property Abroad on LifeStyle HOME.