Knowledge is vital in buying homes aborad

May 23 2007 by Bill Gleeson, Liverpool Daily Post

The foreign property market is booming. Bill Gleeson reports

BRITAIN already has a highly valued housing market. So, if you are looking for a place to buy a second home, you may have to look overseas.

The boom in the last decade in low-fares travel to Europe and increasingly beyond, to the Middle East and even North America, has meant that people can widen their horizons. No longer do people confine themselves to an expensive ferry journey to Brittany.

But, as well as being cheaper, homes in the Mediterranean have the virtue of being located in a sunnier climate.

But where are the best places to look for a home that combines style with investment potential?

Where are the fashionable places?

Alan Bevan runs a business that specialises in advising would-be overseas second home buyers about their options. Mr Bevan, who runs a busy Liverpool city centre property agency, City Residential, commented: “As more and more people look for new ways to build wealth and invest their money, the popularity of buying overseas property grows.

“Buying a property for investment purposes basically means that you buy to rent out, which for obvious reasons is often far more profitable with overseas property.

“Not only can you charge a higher rent to tourists, but you also have a holiday home that is paying for itself.

“The other option is that you can move abroad and buy a property with potential to increase in value over time.’’

In terms of general advice, Mr Bevans warns: “You should take as much, if not more, care buying an overseas property as you would buying one here in the UK.

“The temptation might be to rely solely on the advice of others or just one visit to the area, but this is a huge investment and should be treated as such.

“You wouldn’t buy a house in the UK without considering the local area, crime rates, size and value for money, etc, first and the same applies abroad.

“Be sure what you want from the property. Ask yourself questions like: if it’s an investment property, will that local market give me the rental return I need or want?

“If it’s for a holiday home, is there enough to do locally, how far am I from amenities and is it a tourist-friendly location? And, if it’s to suit both purposes, make sure all those considerations are thought through.”

“While lots of people might have preferred solicitors for property transactions, it’s important to have someone with specialist knowledge of where you’re buying. Professional ad- vice from a solicitor who special- ises in the country of purchase will be able to identify potential pitfalls and concerns, saving you time and worry in the long term. Good developers and agents should be able to recommend someone appropriate to you.

“Don’t be bought by glossy pictures and promises. You should never buy without seeing the location and site of your property. It’s important to see it in context, as what appears to be a sunny villa in a glossy brochure could really be an average house next to a main road or a building site.”

He adds: “Take the time to see what else is in your price range – is it really good value? Perhaps it’s cheap for a reason or something has been overpriced. Arm yourself with as much local market knowledge as possible – the saying ‘knowledge is power’ is certainly true of overseas investment.”

Current overseas hot-spots include eastern Europe, but it can come with a wealth warning.

One seasoned overseas property buyer said: “You can get good bargains in Bulgaria, but there are an increasing number of stories about unscrupulous east European property speculators. You need to avoid Bulgaria’s Black Sea rip-offs.”

France, Spain and Portugal remain popular with British buyers but with cheap flights offered by the no-frills airlines such as Easyjet and Ryanair, markets farther away have opened up to more people. But if investment is part of your motive, then beware that you don’t get bargains any more in some traditional areas of the closer continent.

Two decades ago, it was possible to buy an old farmhouse in northern France for £20,000. Now the same house is worth ten times that.

The Algarve is expensive, but there might be cheaper corners of northern Portugal.

Bargain hunters would be advised to look farther afield in places that include Egypt. Wirral resident Alistair Coull, who has owned property overseas for many years, said: “An off-plan four-bedroom and three-bath- room apartment, part of a hotel complex, at the Red Sea resort of Sharm el Sheikh, would have cost £44,000 a couple of years ago. They have risen since. At the time, they were looking at 60% return on investments in Sharm el Sheikh.”

Morocco also benefits from cheap flights to Marrakesh, making this popular. Cyprus is also attractive to Britons as it’s not too expensive, the climate is reliable and English is spoken almost like a first language.

billgleeson