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t is possible to argue that there have never been so many great deals available across the overseas property sector than now. That’s not sales talk: credible statistics reveal prices are signifi cantly reduced in many of our favourite markets, led by Spain, France, Portugal,


Italy and Cyprus.


Whether prices are down from their peak by 10 per cent or 50 per cent, it is clearly a buyer’s market now and if you are looking to buy an overseas property then you must not get swayed by silly prices. We’ve said it before but we’ll say it again: “if it sounds too good


to be true, it probably is.” How often is it true that paying a little more for something pays off in the long run? So always ask yourself the question: why is something so cheap? In a market driven by simple rules of supply and demand, it stands to reason that something that nobody else wants will be reduced in price to a greater extent, like many bank-owned properties in Spain, or short sales in the US. This over-supply in some areas has led to massive discounts and


many people would argue it is exactly the right time to pick yourself up a bargain. What you shouldn’t do is be attracted by a property simply because of the size of the discount, you should remain clear on why you are buying it, for personal usage or for investment.


In some of the best locations properties may only be reduced


by 10 per cent so if you start out with a percentage discount in mind, you will end up disappointed. Clearly a buyer in the current market is in a strong negotiating position, but you need to do some research and fi nd out what is a reasonable price to pay. Then there are the usual things that one should always check.


Don’t forget the important questions Is the property on a healthy and well-established development where all the owners are paying their community fees so that maintenance on common areas is being carried out? In tough times, the non-payment of fees by struggling or too-few


owners should ring alarm bells and any buyer should ask further questions if in doubt. So, location, location, location is possibly even more important than in the boom times, and a good location, such as frontline beach, will always be sought-after. Even if you aren’t buying something as a hard-nosed investment, you should still think of your exit strategy. If you had to sell it on in six months, could you be sure that someone else would want it (ie does it tick lots of boxes)? Who is likely to buy it? Is there a strong domestic and/or international market? To ensure that you make a sound - and safe – investment, you must also use independent legal advice as well as a fi nding an agent you can trust. Your lawyer should investigate thoroughly if a property has any debts - including utility debts – especially those in the hands of banks with hundreds of properties on their books. Don’t neglect plenty of research on what’s selling at what prices so you are able to make an educated decision about whether something is selling at a fair price. Equally, don’t forget all the usual issues such as having a survey


Even if you aren’t buying something as a hard-nosed investment, you should still think of your exit strategy.


done to check for any structural problems and that the property comes with relevant planning permissions, as well as budgeting for any necessary upgrading or renovation. If you are promised “assured rentals” or a certain amount of income from letting out your prospective property, ask for proof that such levels are likely, or you might not be able to afford your property’s upkeep.


What are the ongoing running costs, from community or condo fees to local taxes, insurance premiums (earthquake or hurricane zones) and property levies? If rental income is your priority, is it within the crucial hour to 90-minute transfer time of an airport (depending on the area), and of a type and size of property in demand in its locality? For more on rentals see page 30. Equally, are you allowed to rent it out for holiday lets? (Buyers in


Florida, the Canaries and the Balearics should research this thoroughly). Needless to say, your fi nance should also be in place beforehand and if you are buying with a mortgage then getting an agreement in principle before you start searching saves time and heartache at the end. With many properties languishing on the market for long periods of time in many countries, you should take your time and carefully consider what you are buying and what it might be possible to negotiate. It’s an exciting time for buyers of overseas property, as long as they don’t forget the fundamentals.


AIPP CONSUMER GUIDE 13


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