Property Development Ten Essential Steps For Investors

Date Published:

04/06/2008

Here are tips six to ten...

6. Finance

Apart from the lucky few who are cash buyers, you need to find out how easy it will be to get finance - this will be especially important if you want to re-mortgage a first property to buy a second.

When the time comes for money to change hands, make sure that you are not losing out because of poor exchange rates. Check out specialist currency companies like Money Corp and HIFX to find out how to avoid being caught out. And don't forget to factor in any additional costs: stamp duty, taxes, fees, and so on often mount up, so it don't be surprised when things turn out more expensive than planned.

7. Buying

Always take up independent legal advice from a specialist who speaks the local language and knows the local system. Remember ownership can be more complicated and opaque overseas, so it's vital to establish that the person selling is actually the owner, and that the agent involved has the authority to sanction the deal. Never sign any documents or make any 'up front' payments without first checking with your legal adviser.

Make sure there are no outstanding payments due on the property, as you may find yourself liable for these when taking on ownership. With off-plan purchases, check the developer's previous work and reputation.

8. Running Costs

If you plan to let, don't forget insurance, local taxes, maintenance, marketing costs, management fees and service charges. If you're relying on rental income, it is vitally important to factor any void periods into your calculations.

9. Selling-On Costs

Don't forget to check out the rules on inheritance tax and capital gains tax before you buy. How these are structured can often determine how you should go about buying - in some countries it's better to set up your own company or buy in the name of a child in order to sidestep hefty taxes.

10. Sources Of Information

Which? has recently published a useful general guide, Buying Property Abroad, as has Cadogan - Peter Conradi's Fly To Let. Dedicated property magazines (such as 4homes) and supplements in the national press are also excellent places to start your research.

Expos and events such as A Place in the Sun Live have useful seminars and huge amounts of interesting information for prospective investors. Developers, agents and various other middle men often put on presentation evenings - these can be useful but remember they are sales people above all else.

Embassies and official tourist websites can give useful information on a country's economy and development, but try not to take it all at face value. Perhaps most importantly, talk to other people who have bought in the area or the development that interests you - they are speaking from experience and will often provide a valuable insight into the experience you can expect as an investor.

The views represented in this article are those of the author and not of Channel 4. The purpose of the article is to provide general information only and does not constitute financial, investment, legal or other advice.You should not rely on any information provided in this article and you should always seek out independent professional advice relevant to your own particular circumstances.