Buying a property abroad is both adventurous and exciting. At the same time, it could be a sorry story if not done right. It is a big decision and thus not meant to be something that should be hurried into.
People buy homes abroad for different reasons. Young adults for instance may buy it for vacation and investment purposes. Whereas, older adults may purchase property abroad to fulfill a lifelong dream or reduce retirement expenses.
Below are some of the things anyone considering purchasing real estate abroad needs to consider to avoid making a regrettable decision:
1. Study the country
Either as an investor or potential resident, it is important for anyone considering buying a property abroad to get familiar with the country. There is a lot of information online that can be researched to educate yourself about the place.
Don’t swallow hook and sinker words of friends and/or marketers. Check what the economy of the country looks like; the safety, how rampant is criminality?; what is the country’s currency and how does it compare with your local currency? The exchange rate difference may come as an advantage if the buyer is coming from a country with superior exchange power. This is more favorable for people considering investment and retirees looking at reducing the cost of their retirement.
2. Spend some time in the area
It is not enough to read and watch about the country online. It is advisable for anyone considering an investment in overseas property, to visit the place. This gives first-hand experience and the opportunity to confirm anything already read online.
This time can also be leveraged to make inquiries about legit real estate developer companies, lawyers and even the laws guiding property ownership there.
As a double security measure, checking any company’s authenticity with the local authorities can prevent being scammed.
Physically accessing the property to be bought is also important. This can also prevent being duped or misled into purchasing something different from the advertised pictures.
3. Don’t get emotional
Buying properties abroad is a business and should be treated as one. Anybody considering taking this step should always have this in mind. Forget that a property is located near the most popular heritage building in the country. Instead, the actual worth of the property should supersede. For retirees looking at a change of environment, the beauty of the home should come second to the comfort it would offer any old adult. This does not imply that beauty is not important. It is only a matter of deciding what is needed instead of being swayed by emotion to pick what appeals to the eyes.
4. Do proper budgeting and estimation
When it comes to buying real estate overseas, some people fail to acknowledge or calculate the actual cost. For instance, the list price of a house in reality is not the total amount it will cost any buyer to purchase it. There is a lawyer fee which must be considered likewise other fees charged by the local authorities. This is without ignoring the cost and hassle of relocating.
The calculation should be done to the least expenses. After this, the budget can now be drafted. This saves the issue of being able to finance the purchase of the home but unable to finalize the deal, therefore leading to frustration and possible loss of investment.
5. Determine the source of fund
After the total cost for buying a property has been calculated and the budget estimated, the next and the main determining factor of the deal is the source of funds.
Below are some of the sources of funds tapped into by many people:
- Self-funding: This is possible if you have some cash stacked in your savings or from inheritance. The decision to purchase a home abroad should also be agreed upon by a couple. This can significantly help enough money to self-fund the project.
- Loans: Banks in some countries offer citizens loans to purchase properties. The criteria also differ and your citizenship status may influence the loan process. Some real estate developers also offer flexible payment plans. For example, such a developer may demand a 30% upfront payment. Another 15% after 3 months; demands 15% in another 3 months while expected to balance the remaining 40% on completion of the property.
- Mortgage: This type of fund is often used by buyers who would prefer not to tie up their cash in a single property. Some people take a second mortgage on their previously owned home to finance another.
Older adults are not left. According to experts at Reverse Mortgage (https://reverse.mortgage/how-does-it-work), a company, just as the name suggests, specializes in reverse mortgage loans, the law at present does not prohibit financing property overseas with a reverse mortgage.