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Investing in property is a very popular way of tying up one’s money in the 21st Century, primarily because it is seen as a ‘safe bet’ – of course, there is no such thing. For sure, it is possible to make money and a lot of it when investing in property, but it is by no means a certainty.
Even if you’re buying property overseas on sites like rumahdijual.com/depok/rumah-murah, where your money will stretch much further, and the potential for growth is there, there is no saying whether you will make very much money or not because the housing markets can crash as well as boom, and then there’s the fact that you could make any number of mistakes that could make you regret every buying property at all.
That last part, at least, we might be able to help you out with. Take a look at these common overseas property buying mistakes, and ensure that you avoid them should you decide to invest abroad.
Following Your Heart, Not Your Head
It’s kind of understandable that you might follow your heart and buy a less than optimal, from a financial standpoint at least, property when you’re buying your own home – the own you’ll live in. After all, dream properties aren’t always the best investments for your wallets, but they can be for your heart and your family. However, investment properties are different. You can check out those differences on sites like simonconn.com.
When you’re investing in property, whether at home or overseas, you cannot and should not buy based on your own personal likes and dislikes, You need to choose a location that has potential, buy at the right price and buy in a place where you know that you can get what needs to be done, done. So, let your head to the talking and quieten your heart if you want to stand a chance of making a decent profit.
Thinking It Will Look After Itself
It’s a house; we’re getting good tenants, we won’t have to get involved. We can just sit around and watch the value rise, right? Wrong. When you buy a property for investment, tenants or no tenants, you simply cannot just leave the property to its own devices. At best, it will become dilapidated through lack of use or care, at worst it could be totally trashed by tenants who refuse to pay burgled, or lord knows what else.
Now, if you are investing in property overseas, then you need to (pardon the pun) oversee things, even if only by hiring a property manager to take care of the place for you. If you fail to do this, you’ll have to be very lucky indeed to see a profit now or in the future.
Buying Any Old Place
When you’re buying in a foreign market, it can admittedly be difficult to know exactly what represents a decent property, and you might think that even if the place doesn’t look too great you can do it up, make it more desirable and make a buttload of money from it, but you can’t assume any of that will happen.
It’s much better to take the time and research property in the area, what sells, what’s easy to rent, how difficult it is to get planning permission to make any changes that might be needed – things like that – and perhaps pay a little more for a better unit than it is to buy the first piece of property you can find. You might think that this goes without saying, but you’d be surprised just how many people don’t do any of this stuff before handing over thousands of dollars.
Not Checking Out the Supply and Demand
If there are lots of, let’s say houses, for sale in the same area you’re planning on buying, you need to ask some questions. You need to know why there are so many units available. Has the area gone downhill? Are the houses unstable or unpopular? Or is it just a coincidence?
If there is an abundance of houses available in the area and it isn’t for good reasons, like the area has suddenly become popular or something like that, then chances are the properties there aren’t in demand and that means you don’t want to buy and become a supplier in a market where there is no market for your product.
Not Understanding Fees and Regulations
You might know what fees you have to pay at home when you’re buying a new property, and you might be familiar with the planning process and neighborhood regulations here, but things are likely to be a lot different in other countries, which means you need to familiarize yourself with every single fee and regulation regarding the buying of property by foreigners that you can, using websites like http://www.frenchpropertylinks.com/thefees.htm AND by speaking to people in the know there. If you don’t do this, that great deal could end up being a dud, costing you a fortune and leaving you unable to sell. Okay, so that’s at the extreme end, but it’s not unusual by any means.
Not Taking the Exchange Rate Into Account
Again, you would think that this doesn’t need to be said at all, I mean it’s obvious, right?. However, so many people get excited about investing in a great little property they’ve found overseas that’s so cheap, not taking into account the exchange rate, which makes that great little property less of a steal and more of a bank robbery.
There really is no excuse not to check out the actual price of buying overseas now that we all have fast access to exchange rates online, so don’t let yourself be fooled by them, and check the real price of not only the property but the fees, the cost of hiring a property manager, etc.
Not Hiring a Lawyer
When you’re investing in property overseas, never ever think that you can do the deal yourself. Sure, you might be able to pull it off here at home, but as I’ve mentioned several times above, you are very unlikely to know all of the rules and regulations at the place of purchase. A good lawyer who speaks both the native language and English will be able to help you get your ducks in a row and ensure that you have all of the correct documentation you need to take ownership of your new property in an unequivocally way.
Just make sure you do your homework and employ a reputable lawyer or you could end up with even more problems – so many people have been stung by less than honest lawyers over the years that you need to be absolutely sure the one you’re using is legit!
Not Visiting Yourself
Again, you’d think this is a rookie mistake, and it is, but it happens so often that it’s worth mentioning. If you’re buying property overseas, even though it’s for investment and you aren’t going to be living there, you should go over and see it with your own eyes. The sad fact is that for every genuine estate agent and property seller, there is another dodgy one looking to rip you off, so you need to not just look at pictures of that villa, but actually get out there and look at it with your own two eyes.
Of course, having a good lawyer could make it easier for you to not have to do this if they’re willing to check it all out for you, but it’s still a good idea to see what you’re buying for yourself in the flesh, so to speak.
Not Thinking It Over for Long Enough
Perhaps this should have been at the start of the article rather than down here at the bottom, but perhaps you would have dismissed it immediately had you not looked at the other potential problems with buying property overseas as an investment.
However, the most important mistake overseas investors make when it comes to property is not thinking long enough or hard enough about it. Ask yourself if you’re really in a position to buy, maintain and potentially even lose money on a property that could be many thousands of miles away. If you’re not, then investing in something closer to home might be better for you.
The bottom line: Investing is a very good idea if you want to have a strong financial future; investing in property can be a great idea, even overseas, but only if you don’t make these fundamental mistakes along the way. So, take your time, don’t make any snap decisions and ensure you know exactly what you’re doing before you pour your life savings into a far-flung property portfolio. You know it makes sense.