d still offer value uld investors be aware of?


I suspect many people are ruing the day they embarked on a foray into overseas property investment. Unless you are rich or are able to purchase your overseas property for cash my advice would be to consider only the downsides of any potential purchase. However, if like my wife you decide to take no notice of my impassioned plea for caution in your attempt to increase the size of the British Empire, heed my words of caution. Don’t let clients kid themselves they can easily cover the running costs with rental income. It will take at least 15 weeks of bookings a year to cover your costs in my experience. If renting the agency will usually levy at least 50% in booking charges, cleaning, meet and greet fees. If you are going to use a DIY property listing for example “owners direct” who is going to do your meet and greet, cleaning, and attend when the cooker blows up? When things go wrong with your overseas property and you are at home it’s money, money, money. Most overseas loans are full status and paperwork by UK standards. Fees tend to be higher and many countries levy a kind of stamp duty for registering a mortgage. Estate agents will usually charge the buyer as well as the


seller, and expect legal fees to be much higher than here in the UK.


In some countries the buyer pays the legals of both sides too. Purchase tax is much higher in other countries too. In Italy for example the equivalent to stamp duty on a second home is 10% of the purchase price. Most horror stories are often not a case of other countries being full of criminals ready to rip you off (at least no more so than here at home!), it’s more a case of a mismatch of expectations.


Custom and practice in property and law around the world is very different. Acquaint yourself as much as you can. Learning the lingo is a good place to start and is a sign of respect. If you speak the native tongue even a little it empowers you no end.


Chris Gardner, director, Obligo


Spain, parts of Portugal, Cyprus, Greece and Bulgaria have down valued properties while Turkey has bargains and potential growth as they are not affected by the Euro and the build and legal processes are getting better. France and Italy continue to add a wide choice of diversity of


product to suit all tastes and price requirements and neither has been as affected by a property slump. The USA has its own diversity of products. In Florida there are


a large number of investor properties available in the tourist areas while in other states there is a combination of investor and holiday/ retirement homes available. Cape Verde still sees quite a few cash sales, though lending


here is slow and bureaucratic. Brazil has a growing economy and I predict this market will strengthen. Australia has good investment opportunities, especially around


the cities. There is a lot of interest from the Far East, but exchange rates have dampened down interest from European investors. Wherever your client may purchase, they must be aware of


some basic rules when considering the purchase. Always take independent legal advice and never sign a contract


in a foreign language without getting it properly translated. If signing an English version, make sure it is a true translation of the original foreign contract. If purchasing a new property, get developer references,


including a history of how long they have been selling, past customers’ experiences and if possible, check what they have built in the past and how they survived the test of time in high temperatures. Get an independent valuation, even if you are using a bank to


provide a mortgage, as they may only undertake a basic survey and a more detailed valuation may show up other defects. If purchasing from previously repossessed stock, check why


the lender is selling and that all the appropriate planning, building and habitation licences are in place. Some properties could have been repossessed because they did not originally sell due to these licences not been granted and your client would not wish to inherit an ongoing problem.


Simon Conn, overseas property and finance specialist


sense. Do you want to be a part of the next Bigger Issue? Email nia@thepublishinggroup.co.uk mortgage introducer JULY 2011 31


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