AN OVERSEAS SECOND HOME AS INVESTMENT PROPERTY ABROAD

Property investment overseas is a long term benefiting venture. The asset purchased is always profitable and you as a buyer should never consider your overseas property as passive investment. For, it can serve as one of your best investment property abroad.

In the 21st century people are exploring every possibility of investing in the real estate industry. In the recent years there has been a lot of hype about buying property for sale abroad. As per the statistics of real estate agents, about a million of British people own a home in other European countries. With the changing trends, there is a growing interest in overseas property for sale.

With many people moving abroad for vacation, it is convenient if you buy a property in your favourite destination. The survey result of National Statistics shows that around two hundred thousand UK people travel abroad to find a second home – and make an investment in property abroad.

When you decide to buy a home abroad, there few important things you have to consider. The following may be of help for making a good investment and finding the right overseas property for sale.

• Where to buy - The first and foremost thing is to decide where to buy the property. Your investment property abroad can be made in any country, so it is wise to choose the country first and then proceed further. It is better if you make your investment in your most favourite destination.
• Location – The next important thing is to choose your locale. It may a country house, a town apartment or a beach side villa. The vacation home is going to be one of your ideal getaways. Hence it is important to choose the right place. In case, if you are moving abroad for business prospects or investing just for the sake of rental income, it is always better to invest in town property.
• Budget – The amount the buyer is willing to allocate for his investment in property abroad. Overseas property for sale can vary from ordinary house to luxury villas. So, the buyer has to fix his/her budget first before investing in property broad. The amount required for the property can be availed even from overseas mortgages. The mortgages ease you of financial worries and help you make a successful investment. There are several mortgage plans available. You have to choose one that fits you best.
• Access to the city – The buyer has to decide upon the accessibility to their neighbours. This is crucial because investment property abroad can yield more rental income if it is within accessible limits to cities.
• Size – The size of the property has to be decided. It can be one bed room or multi-bedrooms apartment or individual building or villa. The size is proportional to your budget. It is generally advised to look for a property that does not exceed your budget or financial limit.
• Rent –Property abroad is always not a first home, so buy to let property abroad can be considered. This is a rewarding business venture as the property will earn you regular rental income. In this way, your overseas second home will become an investment property abroad.

These are the initial questions to which answers have to be found before entering into a deal with regard to your overseas second home or investment property abroad. When you are applying for overseas mortgages, it is always advisable to read through the legal proceedings of the country and especially the region where the property is located. Banks can also help the buyer in this regard. But the investor has to be aware of the interest rates and the insurance schemes before investing in property for sale abroad.

When you consider your second home as vacation home, then it is better if you plan to let out your property for rent. Buy to let property abroad is always worthy as it generates good income. Popular holiday destinations especially can yield value for your money. Hence by investing in buy to let property your overseas second home can be a resourceful investment property abroad.

INVESTMENT PROPERTY ABROAD: BUY TO LET

When someone invests money on buying a property and lets it out for rental it is termed as ‘Buy to let property’. Chiefly, buy to let property is bought as overseas property and serves as both a holiday home and as regular source of income.

Buying property abroad has become a good investment venture for the following reasons:

• It is a long term investment
• Non-residents wish to buy property and use them as holiday homes
• It saves tax deduction
• It yields regular rental income

Due to the above mentioned reasons, there is a higher demand for overseas property. Investment property abroad also thrives because of the government’s supportive plans and benefits. It has been made easy for a non resident to buy property as it serves as a source of foreign investment in their country. All one needs to buy property abroad is a fiscal or tax number, regular source of income, an account in the local bank and a valid passport.

The property can be an off plan or a resale property. An off plan property is a new development which is bought from a property developer or property management company. It is a property that is sold based only on the development plan of the property. A resale property is a used property which is bought directly from the owner. Both off plan and resale property markets are high.

Investment on property abroad has been made easier with the availability of mortgages from banks. Based on the value of the property one can secure loan for buying it. A bank representative evaluates the property and fixes a value for it. One can generally secure upto 80% of a property’s value. In some countries, few banks offer even 100% mortgage for property investment. This percentage might slightly vary for a non-resident. The loan period might also vary from 5 years to 30 years approximately.

Most of the banks offer international mortgage and encourage investments on property abroad. Most of the banks which have branches in France, Spain, Italy, Portugal, Florida, South Africa, Bulgaria, Australia and New Zealand finance for investment on overseas property. Overseas mortgage is easily available from these banks.

Mortgage is available for all kinds of properties such as studios, villas, apartments, leaseback and buy to let properties which might be off plans or resale properties. However mortgage interest rates and the method of payment might vary according to the type of property and the place of investment. For example, for off plan property the loan is available only after the completion of the project.

It is always advisable to have a legal representative during overseas investments. As it is essential to run a background check on the property and other legal documents like whether there is any unpaid mortgage on the property, debt, etc. In addition, the legal advisor can take care of insurance, tax payment and maintenance on behalf of the owner in his absence.

Buying overseas property is a biggest investment one can make. In most of the countries the availability of property is lesser than the demand, thereby creating a seller’s market.