There are a number of things to look out for when investing in properties. And even more so in properties overseas. It may be familiar ground if you know your stuff, but otherwise it could be a rather risky affair.
Photo: Apartment in Balmain, NSW, Australia.
Every country’s investment environment varies, sometimes quite drastically, and while brochures and presentations may look sleek and professional, the ins-and-outs of the local economic infrastructure may speak the same language. Thus finding out more about the legal and tax systems of the country in which the property is located would be one of the first and most important steps. The Council of Estate Agencies (CEA) has good advice for investors in their consumer guide for foreign property investments. Some countries have restrictions on the type of property foreigners can purchase, and also on whom they can eventually sell it to and the about of taxes or stamp duties they have to pay. In Australia for example, foreigners purchasing property have to seek approval from the Foreign Investment Review Board; whereas in Cambodia, where the market is just opening up, the restrictions are not as limiting.
Similar to how you would plan for any major investment, doing the groundwork and sums will help you financially. It is wise to know what your options are should there be a need to sell, and how long it would take you to do that would depend on the political and economic situation. Make the effort to find out the developer’s track record, and even take a trip down to look at the properties. After-sales property management could sometimes make or break your bank account and familiarising yourself with the legal systems of the country could ensure you are well-covered in unexpected circumstances. Having a solid point-of-contact in the country, such as a property agency or management agent could also reduce the risk and make the investment experience a smooth-sailing one.
