Buying a Home Abroad
Buy Safely Abroad
We aim to ensure you understand and manage the risks to avoid subsequent problems:
· AIPP's Buyer's Guide - guidance on managing the risks of buying a property abroad. AIPP is a trade body that vets and approves overseas property professionals. Ensure that your agents and advisers are members of AIPP so that If things go wrong you get the support of their internal and independent complaints procedure.
· OGC's Overseas Property Guides explain the buying process fully for each country, making you aware of common pitfalls and mistakes. Follow the link on the right hand side of the page to find the guide for the country where you are considering investing.
Choosing your Destination and Deciding to Invest
The first step in turning an idea into reality is to clarify your objectives in investing:
How do you plan to use the property?
- Investment property?
- Second home abroad for part of the year?
- First home abroad in short term or long term?
- Exclusive use, available to friends and family or for renting out to the public?
Do you have a specific location in mind?
- Identified the country, city or resort - take a viewing visit to different places to narrow down your choices?
- Understand local market conditions, rental potential, regulatory environment and other issues that might impact the property value or use?
- Are you aware of immigration and work permit requirements?
What can you afford and how will you finance the property investment?
- What size property and what facilities are you looking for?
- Do you have existing funds from pension or sale of a property in your home market and/or will you need an overseas mortgage?
Ensure you understand relevant overseas property law and have an independent lawyer acting exclusively on your behalf. Using the lawyer connected to the seller leads to clear conflicts of interest: they will always favour their primary client, the seller. Proper title to the property and underlying land must be held and properly transferred and registered in your name. Any necessary rights to access, water etc and any rights others may have over the land you are buying are also essential.
Planning, building and other regulations need to be checked on your behalf to ensure that the property is not an illegal development and is in an area that is properly designated for residential property. Searches to investigate potential for developments, new roads etc also need to be effective.
In Spain in 2007 properties had been built on land that had been designated as ‘green’ rather than as ‘urban’. Lawyers carrying out proper checks would have identified such issues.
Property laws in other countries will vary from your home country. In some jurisdictions debts are linked to the house rather than the individual. Thus a seller can sell the house subject to a charge based on his borrowings and the debt passes on to the new buyer.
Appropriate insurance cover will need to match your plans for the property. If you are renting out the property ensure you are insured against damage caused accidentally or otherwise by guests or tenants. Cover the cost of putting them in alternative accommodation if your property becomes unusable and cover the property including any pool by Public Liability Insurance in case your tenants or their guests have an accident.
If you are going to be absent from the property for long periods ensure that the policy still covers you.
Specialist insurance is often required based on local climate and geology (earthquake cover, forest or bush fires or storm, tornado and hurricane damage). Your independent lawyer, local insurance broker or other advisors will be able to advise on specific requirements.