Letting a property overseas takes more time and effort than one in the country you reside in, mainly due to the fact that you are based miles away and also have to deal with language and culture barriers.
This can lead to overseas landlords making mistakes more regularly than standard ones, so we decided to look at four common mistakes overseas landlords make and how they can be rectified:
Not getting to know the country your property is based in
Visiting a country on holiday doesn’t mean that you know it, even if you have been there numerous times. Most destinations people visit on holiday are specifically designed for tourists, and therefore they can be extremely different to what the rest of the country is like.
While you may get on with the people around the pool and in the hotel, the same cannot be guaranteed for those who reside in more rural or urban areas that are not designed with tourists in mind.
If you really feel an affinity with a country, then make sure you get to know as much of it as possible before investing in a property there. That way, it will be more likely that you will get along with your future tenants and you won’t regret your decision in a few years’ time.
Governments in a number of countries across the globe have recently implemented taxes, rent price freezes and other regulations on overseas investors in order to stem housing bubbles.
This is particularly true of countries that are seeing huge economic growth, yet have previously been considered developing nations. While a country is still in the early stages of economic development, investment in properties from overseas landlords can price residents out of the market, which is why numerous governments have stepped in.
By ignoring legislation set out by these governments not only are you risking invalidating your overseas property insurance, but also receiving hefty fines. In the worst case scenario, the government could even repossess your property, meaning that you will completely lose your investment.
Failing to invest in a team of experts
It is nigh on impossible for an overseas landlords to run their business completely on their own, as nine times out of ten they will not have the required knowledge about the legalities concerning property in the country or an in depth knowledge of the market.
Even though it’s costly to invest in a team of experts, if you try and skimp on it, you will find yourself struggling in the long term.
A great way to create your own team of overseas letting specialists is to do some research on companies available in your area and see what experience they have. Generally, if they have been established for a long period of time, they should be able to provide you with case studies and success stories on previous overseas landlords that have used their services. Don’t try and rush this process – take your time and make sure you get the best team available.
Not taking into consideration fluctuating travel costs
If you have only ever visited the country your property is based in during certain times of the year, then you will have no idea how much the cost of travel can fluctuate.
The amount it costs to visit your property at certain times of the year can therefore be a nasty surprise, one that can prove extremely awkward if you need to fly out to your property urgently but can’t afford the flights.
Don’t forget that travel costs don’t just mean the cost of flights; they also include the amount you have to spend getting to airports, any food and drink you buy while on your journey, time you have to take off work, either as holiday or unpaid leave, if you have another occupation and accommodation for while you are staying in the country your property is based in.
All of this can add up to thousands of pounds extremely quickly, and if there is a huge issue with your property you may have to make the trip a couple of times. This is why you need to always have a savings fund and an emergency plan in place.