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The pitfalls of buying an overseas property

Wednesday, 7 June 2006 12:00 AM

TV shows such as A Place in the Sun can make an overseas property seem a straightforward case of choosing between a villa with a pool over an apartment with sea views.

But for the quarter of a million plus Brits who own an overseas property, and those who are about to take the plunge, the reality can be somewhat different.

A new guide from consumer group Which? identifies the many pitfalls that buyers of overseas property face.

The guide includes a range of common sense advice, such as do not buy an overseas property unless you are sure you can afford it, and that buying a property unseen often ends in disaster.

Buyers are urged to commission adequate property surveys, apply for the proper planning permissions and take property legal advice.

However, the guide also contains tips that are less immediately obvious; for example ensure you check the credentials of the seller to see whether they have the legal right to sell, and whether the agent is qualified and bonded to hold a deposit on your behalf.

It draws attention to the pitfalls of relying on budget airlines. If your tourist rentals depend on cheap flights to the local airport, what happens if the airline decides to close the route?

What about your heirs? Inheritance rules in many foreign countries are restrictive and you will therefore need to ensure you have a will in place that is valid in the country concerned.

"The TV shows that have helped fuel our obsession with overseas property make buying abroad look easy," said Jeremy Davis, author of Buying Property Abroad.

"But in reality finding, purchasing and owning overseas can be a time-consuming business, and turning a foreign property into a successful investment can be even more of a struggle.

"Get all this right and you could have a wonderful new asset which gives you and your family enormous enjoyment over the years, and greater wealth in the long run. Get it wrong and you could be risking a good chunk of your future security on a pipe dream."

Top ten tips for buying an overseas property
1. Only buy a property if you are sure you can afford it.
2. Do not buy a property without seeing it first.
3. Hire an English speaking lawyer to guide you through the process.
4. Check the credentials of the seller and agent.
5. Do not put down a deposit too early.
6. Do not buy a property solely on the basis of price.
7. Take account of ongoing costs in owning an overseas property.
8. Do not rely on the existence of cheap flights to the local airport.
9. Avoid doing things on the cheap when renovating.
10. Ensure your will is valid in the country concerned.

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