10 key things to remember when investing in a property abroad
Purchasing a property abroad especially in Europe may seem easy, but there are a number of aspects one needs to take into consideration. We have collected some very important ones which you should remember when buying a property in Europe and finalizing your investment.
What will you use the property for?
This is one of the most important considerations when buying a property in Europe as it will directly influence your next steps including but not limited to everything from your budget to the type of insurance you purchase. For instance, when buying a property for the purpose of investment, you will need to make all financial decisions keeping in view your estimated return.
Knowing the tax system in Europe
All around the world, tax circumstances are different as each country has its own way to deal with taxes. When investing in a European property, one should take care of the tax regulations as they play an important role. Although most of the European countries specially the member states of the European Union might have somewhat similar tax policies, still it’s always a good idea to get yourself familiar with the taxation related aspects of the country.
Transferring funds and understanding the exchange rates
If you are from a non-European country, this point is specially for you. Investing in a property means flow of money. Sending and receiving money can turn hectic as there are always chances that you may face fluctuating currency exchange rates. Therefore, you should do a background research regarding how you would be transferring money. The easiest way could be to open a Euro currency bank account in your country as most of the European banks deal in Euros. Sending Euros to a Euro bank would make sure you don’t fall victim of poor currency exchange rates.
The need for Finance and Funding
Financing is one of key things to consider when you are investing in a property abroad. Securing finance can be a challenging task especially given the fact that it will be subject to various European and International laws and regulations, and the funding would be done in the local currency of a country. If you do not possess enough means to purchase the property from your own savings and funds, you should identify options to obtain a mortgage. This will make sure that your investment does not face any financial hurdles.
Researching the location and local amenities
Even if you are happy with all the tax and financial features of purchasing a European property, it is suggested that you must still conduct research into the location, transport facilities and local amenities in the area. Check what sort of amenities you would like to have close to your property. It is an important point to consider regardless of your intentions to live there or renting the property to generate a consistent return. However, if you are purchasing a home with a view for relocating, you will need to focus on standard considerations such as the surrounding area, local amenities, and school catchment regions.
Research different legal system
Since each country in Europe has its own laws concerning properties. It is better to research the type of laws the country follows as this can directly affect it at the stage of property buying, selling, or even ownership. It is always better to get in touch with some native lawyers of the country to acquire all required information.
Finding hidden costs
When buying a property abroad, do take care that you don’t get trapped in hidden costs associated with buying a property. These charges can consume a substantial amount of money. Before you make any final decision, discover these extra costs, if any associated with the buying of the property.
Rental laws and renting your property
Renting your property in Europe is a great way not only to generate some good income, but also it will save you from yearly maintenance costs. If you intend on renting your European property, you should consider the regions most popular for tourism during peak and non-peak seasons as you may experience a fall in demand and income during that specific period.
However, before making any such plans, please keep in mind, that some European countries have tightened up their policies on renting the homes for tourism purposes. Many countries in Europe, especially those in European Union, now require owners to obtain some kind of license to let their property to holidaymakers. Therefore, you should research the laws of the country before buying a property.
Safeguarding your property in your absence
This point is also important for those who want to rent their home to tourists in order to make a profit. Such sort of investment will mean that your property may remain empty for some time during a year. Therefore, it may be necessary to employ someone, who makes regular visits at the site of your property and organizes necessary maintenance tasks, whenever required.
Finding the path of progress
European cities keep on upgrading their infrastructure projects. Search for any major to-be infrastructure upgrades in the area you are interested in. If you are one of the Path-of-Progress investors, you are definitely going to benefit from construction of new projects, or you may want to avoid those projects if you are looking for continued peace and solitude. In either way, you should consider them.
Do your research and don’t commit to buying without it. Investors should pay close attention to economic indicators, tax and tenant regulations.
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