Property Abroad

Owning a property abroad and due diligence
Due diligence and property go hand in hand, more so if you are looking at overseas investment property. Investing in property abroad has its fair share of risks, the most apparent one of them being that you are in a different country all together. When you look at property investment there are 4 basic questions that you should have concrete answers to:

• Capital growth possibilities: Long term and medium term
• Rental capacity
• Market situation: buying and selling prospects
• Feasibility of the property as a holiday investment

 

To have all these questions answered, your solicitor needs to present you with a detailed due diligence report in order for you to make your decision. A lot of the times investors get carried away by flashy advertisement and even a property investment club that might seem promising. To minimise your risk you need to work with a lawyer who is independent.

Make sure the UK Law Society covers your solicitor

The number one tip for making sure that the due diligence report is accurate, get yourself a good lawyer. Lawyers that come under the UK Law Society are your safest bet as there have been incidences when local lawyers have been involved in corruption etc. These approved lawyers cost more, but when you are buying property abroad, this extra cost will be worth it.

Make sure you know what your money is paying for

Lawyers in the UK usually charge upwards of ₤100 an hour. It would be a mistake to assume that this fee would cover everything associated with the overseas property sale. Additional like meetings with the developers, getting a notary deed signed etc. will all cost you more. You need to be absolutely clear about what you are and what you are not paying for right from the start.

Learn to manage your lawyer

Your job does not end just because you have managed to hire a top notch UK lawyer to handle you affairs when it comes to investment property. On the contrary, your job has just begun! At this point it is important for you to remember that you might have had your first consultation with a lawyer who is senior, however he might not necessarily be the one who will be interacting with you on a daily basis. It is important that you are proactive and do a little homework of your own on owning property abroad so that your lawyer knows what you expect from him.

Check the fine print

Once you have your due diligence report for your property abroad in place you need to make sure you check all the fine print, in the contract as well as the due diligence report that has been presented to you by your solicitor. Make sure you are getting exactly what you asked for. This is especially important if it is a discount property as these properties generally sell 10% to 25% cheaper than the asking price that they originally start out with.