Even though the UK lettings market is doing extremely well right now, a number of landlords still look overseas when it comes to buy-to-let properties. For some, there is something about the allure of a foreign country that makes letting a property out there seem like the practical thing to do – especially if they are planning on using the property themselves during certain parts of the year.
However, others see letting properties abroad in more financial terms, as some countries’ property markets are doing extremely well right now. Whatever the reason, letting a property abroad is extremely different to letting one in the UK, with the distance between you and the property being only one factor. Cultural differences, changing economies and language barriers can all make letting a property abroad difficult at times, unless you have a certain set of practices in place.
In this resource article, we look at the issues most landlords face when letting out a property abroad, and how they can be easily overcome with a little bit of know-how:
You will Automatically Become an Absent Landlord
Unfortunately, if you let a property abroad you will consequently become an absent landlord – a landlord whose personal home is a substantial distance away from the property they let. However, being absent isn’t just about distance, it also means that building up a relationship or dealing with issues with your tenants is also much harder. To combat this, there are some things you can do:
- Put dates in your calendar: Aim to visit your property at least three times a year and stick to your plans.
- Always be polite: Once tenants have moved in, try and make some form of contact. If language is an issue, send a letter containing your information and ask your letting agent to interpret it.
- Acknowledge your responsibilities: Accept that if something goes wrong you may have to deal with phone calls and making overseas property insurance claims in the night.
Have a Team at Home and Abroad
One of the best ways to ensure that your overseas properties provides a return on investment is to have a team of people behind you whose responsibility it is to keep everything running smoothly. If you already let properties in the UK, then you will most likely have a solicitor and maybe even a letting agent. When you first decide to purchase properties abroad, talk to them first and see if they can help or recommend someone who has experience in the field.
It may be wise to have two separate letting agents if you let property both in the UK and overseas, as it means that you will be able to keep things separate and hire experts for each type of letting. Letting agents in the UK that specialise in overseas property management will probably have offices in some of the most popular countries, or will be able to put you in touch with someone you can trust.
Keeping Up To Date with Information
One of the biggest difficulties of letting properties overseas is that you will need to keep up with everything that is happening in the country they are based in. For example, if there is a crisis looming in the property market, you may want to hold back from making an investment until things look more stable. There is often a temptation to buy property abroad if it is much cheaper than that in the UK, however, be warned that sometimes the reason they are so cheap is that there is little demand for them.
Understanding the ins and outs of the economy is time-consuming enough if you are in the UK, so don’t underestimate the time and effort you will need to put in if you are letting abroad. Even though your letting agent will be able to help you, it’s essential you try and find out as much information as possible on your own.
Final Tip: Most people who successfully let properties abroad do so in a country that they have visited a number of times and know relatively well. So if you have a favourite spot somewhere in the world, that’s the place you should look for property first!
- 4 Tips for Absent Landlords. (2013). Retrieved from the Just Landlords website: https://www.justlandlords.co.uk/blog/4-tips-for-absent-landlords/
- Overseas Property Insurance. (n.d.). Retrieved from the Insure My Villa website: https://www.insuremyvilla.com/
- 4 things you need to consider before investing in European properties. (2013). Retrieved from the Just Landlords website: https://www.justlandlords.co.uk/blog/4-things-you-need-to-consider-before-investing-in-european-properties/
Disclaimer: This article is for information only and is not official guidance, FCA approved, or legally precise. Just Landlords has used all reasonable care in compiling the information but make no warranty as to its accuracy. If you require information on landlord legislation or best practices please contact your legal representative. For details see our conditions.