If you are purchasing for rental income you need to look carefully at facts and figures

One of the biggest mistakes people make when buying abroad is to purchase on impulse. Holiday makers are the worst as they are easily swayed by the tough tactics of the local unprofessional salespeople keen to sell development irrespective of whether it is the “right” property for their client.

Our advice would be to take all the paperwork, even possibly visit the development, but sign nothing. Come home. Take stock and seriously consider all aspects of the purchase.

Make a constructive decision

Consider which country is best for you.

Are you looking to visit regularly? Then the property should be within easy access of an airport. You should check availability of airlines to your chosen destination. Are there frequent flights? Are there any budget airlines? Is the property easily accessed from the airport if you are going to fly out frequently?

Are you looking for something fairly cheap? Then you may wish to look at emerging Eastern European countries such as Bulgaria, Croatia and Romania, but you must appreciate that because there are “emerging” there are no past figures to show capital growth or income returns so you do take a risk.

Do you speak the local language? If you are looking for a place to retire to, then you may need to consider a property where the locals speak English or you speak their language. When trying to sort out your internet connection, your electricity supply, pay bills or indeed seek medical care, you may need to know that you can communicate.

Consider who your tenant is going to be

Are you buying for rental income? If you are purchasing for rental income you need to look carefully at facts and figures. Which areas produce the least void periods, where is competition high for rentals, is the location of your preferred property going to appeal to a wide number of possible tenants?

Are your tenants going to be business people or holiday makers? Are they city, country or beach type residences?

Properties on golf courses often prove highly successful particularly in countries with year round good weather. Other good areas are those with summer and winter facilities such as beach and skiing. Cities too, are good for rental returns but need to be carefully sourced to ensure that they are close to all amenities.

Seek advice when calculating rental income

Always allow for void periods and take this into account particularly if you are buying the property on a mortgage and need the income for repayments.

Check that there are no extra bills to be taken into account like local taxes. Be very sure of your letting agent. They can produce enormous bills for works carried out if you are not using the services of a professional body.

Ensure too, that your lawyer makes clear to you all your tax liabilities. Certain countries can add heavy annual tax levies.

Understand the political and economic status of your chosen country

The world is becoming smaller and it is now possible to buy almost anywhere, Panama, Thailand, South Africa, Dubai, Cape Verde etc without ever leaving your UK armchair.

Look at economic growth of countries; understand their political stance and certainly use the web sites for data.

Protect your investment

Whilst it is not possible to literally protect your investment, it is very possible to ensure no unnecessary risks are taken, which should result in a successful transaction and a safe fund for the future. The most important piece of advice is to seek the help of professionals in their field.

The Federation of Overseas Property Developers, Agents and Consultants (FOPDAC) has been established for over 30 years to help and advice purchasers. All members are rigorously vetted so that if you choose an agency, lawyer, tax specialist etc from over 200 members you are assured of a professional and helpful service. For more information please visit: www.fopdac.co.uk or call: 0208 941 5588.