Essential Tips for Buying Property Abroad

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As thousand of people start to think about jetting off overseas for their summer holidays, I wonder how many of them harbour a secret wish to own their own property on foreign soil?

How many of them will spend time on their holiday gazing at properties, before sneakily looking online and trying to turn that dream into a reality?

If that sounds like you, it’s important to consider a few key factors before you embark on such a venture. Trust me – I own and have owned in many places other than Ireland – UK, NYC, Spain, Dubai – and I’ve explored my options in numerous other countries as well. Whether it’s for investment or lifestyle purposes, here are my top tips to help you make informed decisions and avoid potential pitfalls.

  1. Know your motivation:

Before you dive into purchasing a property abroad, ask yourself why you want to do it.  Is it an investment opportunity or is it because you’ve just returned from a lovely holiday somewhere and want to continue the lifestyle?

Separate emotions from logic and ensure your decision aligns with your longterm goals: you might have had that lovely holiday but it doesn’t automatically make somewhere a good investment location!

If it’s not cold, hard logic driving your decision – something that you’re really thinking through and doing the numbers on – you’re trying to keep the lifestyle. Maybe you like the idea of having somewhere in the sun where you can just rock up on a whim without a second thought. Perhaps you’re thinking that it could go on AirBnb to make some additional profit, but that’s still closer to a lifestyle decision than an investment one.

Ask yourself (and be honest) Do you want something because you can profit from it, or do you want it because you want it?

  • Beware the green-eyed monster:

Don’t let envy get in the way of your ability to think rationally.

If you know someone who’s bought overseas, it’s all to easy to want what they have, or (which is worse) feel that you need to compete with their lifestyle.

Honestly, I can’t say this enough. If you’re considering an overseas property purchase, don’t get swept up in the perceived glamour you’re seeing someone else enjoy.  The chances are, they won’t have told you any of the downsides they’ve experienced, just the good bits.

Remember that perception and reality are very different! Make sure you’re looking at the reality of someone else’s experiences and not the beautifully-filtered Instagram version.

  • Seek local knowledge:

Don’t rely solely on a brief holiday experience to inform your buying decisions: thoroughly research the area you’re interested in.  Do some fact finding from unbiased, reliable sources, and don’t get swayed by advertorials that exist solely to press your buy buttons.

I’ll say it again – don’t rush into a decision like this. You wouldn’t buy in an area in your home country without checking it out thoroughly first, so don’t do the same on foreign soil.

  • Understand the market:

An easy trap to fall into is to look at overseas property prices and think ‘Wow, that’s so cheap!’. If you’ve been priced out of the market at home, the temptation to buy somewhere affordable (in an exotic location) might be hard to resist.

But exercise caution: compare local market prices and evaluate whether a seemingly cheap property is truly a good deal in the given area. Assess the value within the local context – is it really good value, or has someone seen you coming a mile off, and decided you’re ripe to be ripped off?

  • Be wary of external influences:

Speaking of which, when you’re dealing with local agents, remain vigilant. Understand their motivations and approach their advice with a critical eye.

What’s in it for them? Do they have your best interests at heart?

Remember that local agents might be working on high commission, in which case they’ll tell you anything you want to hear in order to complete a sale. They might put you up in a hotel, show you all the good bits and tell you about some fantastic opportunities you’d be crazy to miss.

If they’ve got a percentage of the sale at stake, take anything they tell you with a massive pinch of salt and do your own research.

  • Grasp the unknowns and the system:

There are lots of unknowns you’re going to come up against when you’re buying in an international market, and often the first stumbling block is communication. Do you speak the language? If not, you’re going to struggle, and your holiday phrase book is unlikely to help you!  

If you don’t speak the language, you’re automatically excluded from importance conversations and that can be tough to experience – do you fully understand what’s going on and what’s being said to you?

Make sure you understand the legal system in whichever country you’re considering buying in. Don’t assume that solicitors, taxes or legal documents will be the same as they are in your home market. Do you understand how do mortgages work there? Are there any hidden fees that you haven’t accounted for? How long does the process take? The first time I bought in Spain, it all took far longer than I was used to and I nearly lost my deposit because I’d underestimated the time scales involved.

Here in Ireland, I might reasonably expect to put a property on the market and have the deal done with a set time frame, maybe 12 weeks, so I thought selling in Spain would be a similar process and time frame. In actual fact, it took more than a year!

  • Embrace the learning curve and don’t get cocky:

Take the time to educate yourself about the market you’re entering. You might think you know your way around things (see my previous point), but you’re safer to assume that you know nothing.

Don’t get overconfident. What could happen if you end up (for example) in a legal dispute? You definitely won’t be an expert in a foreign system, and that’s going to be a situation where ignorance is definitely not bliss!

  • Partner with a reliable local expert:

If you’re really serious about buying overseas, the best way to invest is in a partnership with a reliable market player who knows their local market inside and out. Someone with a good reputation, and resources to put skin in the game with you. It’s a major red flag if you’re looking to invest in a foreign asset but your partner isn’t putting any money into the deal.

Make sure you have good chemistry and always sense check what they tell you – don’t just believe everything they say! A good partner is worth their weight in gold, but a bad partner could lose you all your capital.

Don’t get me wrong – owning a property abroad can be highly rewarding, but it’s not a decision you should be making on a whim. It demands careful consideration and due diligence. Don’t rush the process: remember (as with everything), to play a long game. Ensure your motivations align with your goals, gather accurate information, and always, always seek professional guidance.