Purchasing real estate in a foreign country is an excellent wealth building strategy for investors but the process is generally more complicated than buying in the UK. When dealing with transactions abroad, engaging a reputable legal firm like PassGo Real Estate Law is crucial. With their expertise in navigating complex real estate transactions, investors can have peace of mind knowing they have a dedicated team working to protect their interests every step of the way.
Avoid scams
Wherever you are planning to buy real estate, avoiding scammers during your property search is crucial. Taking a few steps to protect yourself against unscrupulous third parties will reduce the chances of losing money.
1. Make sure that you never send money or make a deposit prior to meeting a seller in person, viewing the property or possessing a working set of keys.
2. Ensure the seller is the legal property owner.
3. Ask for a relevant property inspection document and use the details to assess the property in person with your real estate agent.
Tax on rental income
If you currently live in the UK, you are required by law to inform HMRC about any rental income you accrue from overseas properties. There will be other tax obligations involved with purchasing real estate abroad so make sure you are up to speed with your liabilities, both at home and in the country where you are investing.
Exchange rate changes
A common problem with buying property outside the UK is the volatile nature of exchange rates and the fact that even a small change can have a considerable impact on the value of a property you purchase overseas. That could make your real estate investment unaffordable overnight due to issues with mortgage repayments and the actual value of the property.
Keep an eye on exchange rates so you can make moves proactively to protect your investments. Fortunately, your lender is required to inform you if a foreign currency you are using to make repayments rises or falls in value by more than 20 per cent. You should also be able to repay any mortgage in a different currency under the terms offered by a lender.
Sending money internationally
Foreign exchange transfers underpin any successful real estate investment deal as they are central to maximising currency and property values. FX compared for international exchange rates makes this often complex and laborious process easy for you by recommending currency specialists who can serve up cost effective and simple solutions for making overseas payments for purchasing properties. You also gain access to better exchange rates and security against exchange rate fluctuations.
Check the paperwork
Just like tax, paperwork is an aspect of real estate investment that you cannot gloss over. You need to have the licenses, planning consents and permissions to purchase a property abroad before you sign on the dotted line for any particular agreement or contract. The devil is in the detail. The planning stage before purchasing is very important.
Independent legal and financial advice
There is often pressure in the real estate industry to make a deposit but resist this temptation before you have had the opportunity to assess any decision in detail. Remember to always seek advice from a lawyer who is independent to any third party in a real estate deal, so you know exactly where you stand. Legal advice from a specialist in the field will make it easier to navigate many of the challenges listed here.
