Buying a foreign property doesn’t have to be intimidating or expensive. In fact, you might be surprised at the simple steps you can take along the way to save time and money.
Buying a foreign property can be attractive for many reasons:
- favorable exchange rates for prospective buyers
- choosing tourism hot spots
- long-term plans for retirement or family vacations
However, foreign property ownership is also an investment and a serious commitment. It deserves due process when considering any possible transaction.
Educating yourself can ensure that you save money buying foreign property – and on the transaction.
Here are four ways to save time and money when buying a foreign property:
1.Know Your Market And Save Money
Most foreign property purchasers like to rent an apartment or property before making the destination a permanent vacation spot.
According to the BBC, buyers can ask themselves a few basic questions to discover whether this is the right property or place for them.
It’s important to remember that like everywhere else, property markets like the Dominican Republic also go through their own trends and cycles.
If prices are dropping in the United States, that doesn’t necessarily mean they are dropping in the Caribbean.
Because of this, it is imperative that a prospective buyer monitors these trends.
It is also wise to compare prices with local rents to understand property valuations.
2. Obtain Legal Assistance and professional help
One of your initial priorities should be to obtain professional legal assistance.
By seeking expertise in local laws you are protecting yourself from any potential scams or unforeseen issues.
They can also ensure that all routine procedures are done correctly. This includes owner registration, property title, planning consent, and any necessary permits.
In addition, it is better to do business only with professional real estate agencies or with reputable developers who understand the process.
The bottom line is, private transactions by owners can be risky.
We also recommend that all documents are professionally translated into your own language.
3. Obtain the Right Mortgages
While most foreign buyers purchase foreign property against their own home, it is also worth considering a local mortgage.
In particular, this is important if the property is an investment that will generate a local income.
One key advantage of seeking a local mortgage is that loans may still be available on favorable terms – especially if the local economy remains stagnant or depressed.
In addition to this, you may discover that your country of purchase has a much wider range of finance options and even lower rates.
However, getting one is not always easy, as foreign banks are often strict when it comes to who they lend to.
4. Save Money on Currency Transactions
Once you have obtained an attractive purchase price on your foreign home and favorable terms on your mortgage, the next step is to get the best terms on your foreign currency transaction.
Although your banks will undoubtedly offer foreign currency exchange services, their terms are typically not the most favorable. In fact, they often include higher margins on rates, steeper transaction fees, and limited transaction amounts.
Whether you are paying in full, setting up a mortgage payment, or just making a deposit, there are better alternatives available. Specialist foreign exchange brokers are most commonly the best deal on large currency transactions and their rates are considerably better than banks. While the rate difference may seem minuscule at only 1 to 2 percent, that can add up to significant savings when dealing with large sums.
One key advantage of using a foreign exchange broker is that many will permit you to reserve transactions at fixed rates as long as one year in advance. Therefore, you can reserve a favorable rate without needing to send money immediately.
In fact, it’s quite possible that prospective buyers can save thousands with a foreign exchange specialist.
And above all, don’t forget your personal tax implications.
The location of your mortgage could have a significant effect on how your property is valued and taxed by your home country. You will need to consider capital gains and rental income as that will impact tax returns locally and abroad.
The most important key is to stay informed every step of the way.
Research is the key to success and being prepared. The key to a successful transaction is to make it an informed one.
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