Frequently Asked Property Investment Questions
Whether you are a seasoned investor or a first time overseas buyer, there are always questions to ask. Here are some which get asked regularly. These answers are not intended to cover every angle of property investing and buying, just to give you a feel for things. We do, after all, guide clients through the buying process.
Are you estate agents?
We offer a more specialist service than estate agents, but still have all the relevant Trade Body registrations to protect our clients in the same way. We help time-strapped expats invest in UK property as part of their retirement plans or to simply build their wealth through property.
And we help busy, business people and entrepreneurs buy their dream home in countries like Spain, France and Portugal.
We save our clients time, money and hassle.
We help ensure the buying process goes as smoothly as possible, so reducing the hassle and stress levels. We know the questions to ask to get to the heart of what you are after in a very short space of time. We can then use our network to help you achieve that quicker than you proceeding alone. By doing things in the right way and avoiding the many pitfalls, you ensure money isn’t wasted and we help with the negotiation process, something not all buyers are comfortable with handling themselves.
We offer impartial advice and represent your interests.
Why use you?
Many buyers think that they can buy a property in a different country on their own and indeed do by researching on the internet. And yes technology has shaken up the market, making more information available to more buyers.
But not all the information is of equal value, nor even accurate. The danger is that it can cost you money, if you act on out-dated information or even misleading advice.
And let’s not forget certain skills are needed. Negotiating the property price for one, or even knowing whether it is a fair price. Then there is the question of familiarity with the buying process, getting the timings right, mastering the detail of the terms and conditions of the contract, knowing how to sort out the finance, as well as dealing with issues that arise during the buying process or snagging phase.
A good agent can help with all these things.
What is Due Diligence?
In layman’s terms it is checking things out. If you don’t check out the property you are buying, then there is a danger the transaction could go wrong. Due diligence is best done at different levels. First at a country level, then location within that country, the property itself, the vendor and the contract set up, in broad terms. A suitably qualified lawyer or Notary do the legal checks for you but it is advisable for you to do some of your own research to make sure you are comfortable prior to this.
Which country or location best suits your needs, risk profile, capital growth and income level ambitions? What’s the level of infrastructure and economic growth?
With regard to the property, you may want to check out the neighbourhood, how easy it is to get to, or how attractive would it be to let out?
Is the vendor selling an unencumbered (without debt) property? Are the relevant licences granted, do they offer long-term building guarantees? Is it most tax efficient buying as an individual or via a company?
A good agent can help with much of this, but there are limitations. A lot of legal checks are best done right at the point of purchase, so that they are fresh and current.
How does buying in France or Spain differ?
Many of the countries in mainland Europe, operate a Notarised buying process, a significant difference between the buying process in England and Wales. This means the transaction is concluded and formally registered in front of a Notary (a specially licensed lawyer).
Buying costs can differ widely too. Whilst stamp duty (Stamp Duty Land Tax, SDLT) tends to be higher in the UK, the overall conveyancing costs are usually cheaper. So in the UK, property buying costs may represent up to 7% of the value of the property bought, (including 3% stamp duty) whereas this could be between 7-15% abroad.
What about financing a property purchase abroad?
it is always advisable to address this early-on in the buying process, particularly if seeking local in-country funding. Mortgages can take longer to secure abroad and the process, as well as the criteria for lending, differ. If this is done early on, then at least there may be a fall-back option for securing finance in your domestic market, but if it is left too late, this option isn’t available.
Under what circumstances can Property be a serious consideration as part of a retirement plan?
Increasingly investors are seeing property as a key part of their retirement plans. You might be tired of the returns you are getting elsewhere or simply want to diversify.
So why is property a decent alternative choice?
In property you get income, which taken as a proportion of the sum paid for the property, equates to yield.
In addition there is the capital growth.
Plus there is the leverage, the ability to borrow money against the property asset. This means several things. Not all of your money is tied up in one property, which means it can be invested in more properties, or other investments, thereby spreading risk. And you get the returns on the value of the property, not just the sum you have invested.
There are other ways of saving for retirement which can deliver higher returns. The advent of Self Invested Personal Pensions (SIPPs) and Small Self-Administered Schemes (SSAS) opened up a whole raft of different investment choices. There are also expat options and variations. On the whole commercial property can be used within these pension vehicles, as long as they meet the relevant Tax Authority criteria.
It is worth noting that property, as a complementary part of retirement planning, is not for everyone and that appropriate advice should be sought, as well as considering a number of factors like your personal financial situation and your risk profile.
Property Venture® is an award-winning, UK-based boutique property firm that helps busy business people buy investment property and holiday homes in Europe, more easily and safely than they can on their own, because we offer grounded common-sense advice.
On the Advisory Board and a Member of the Association of International Property Professionals (AIPP) the business has been vetted, approved and voluntarily commits to Industry Regulation and the Professional Code of Conduct. As well as members of the UK Property Redress Scheme. We are known for our quality customer service and non-pressurised approach to sales. Take a look at what our clients say
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