It was another mixed session for the Australian and New Zealand dollars last week amid some disappointing economic data.
Here we take a look at some of the most essential things to look into when planning an overseas property purchase.
1. Historical property prices
Property should always be considered an investment, even if you are planning to stay in it for ever. You never know what might happen - even if it’s just that you want to upsize, which you might have to once friends and family realise they can get ‘free’ holidays abroad!
You can minimise the risk of the value of your property falling in the future by researching historical valuations in your chosen area. Compare not just the trend of house prices recently, but also their historical levels; are properties valued more highly now than a decade ago, or have prices fallen?
Undervalued properties may catch up to the market, while overvalued properties could see their valuations head lower.
By choosing to buy in an area where house prices are more likely to rise than fall, you’re protecting your investment and are more likely to see a strong return.
2. Save on your currency transfer
Using your bank to transfer the money for your property purchase could see you losing out. Currency brokers, on the other hand, can offer more competitive exchange rates and fee-free transfers. Even a small difference in exchange rates can add up to savings of thousands when transferring the size sums involved in a typical property purchase.
The money you could save by using this kind of provider could help you afford a bigger property or mean you have funds left over to get cracking with renovation works.
Brokers also offer clever currency transfer options that help you keep your budget under control and make your money go further. A forward contract is a good example of this, as it allows you to fix an exchange rate for up to a year before making a transfer.
This can be the ideal way of securing an exchange rate during a drawn out property purchase and protecting your funds from sudden negative moves in the market.
3. Legal obligations
Another way of protecting your investment is to make sure you are on the side of the law.
There are many legal aspects to buying a property as an overseas resident that you need to be aware of. For starters, many countries have rules preventing foreigners from owning property, or at least limiting them to only certain types of property. As stupid as it might sound, the first thing you need to be sure of is that you’re legally allowed to purchase property in the country of your choosing.
Once you’ve found a property and are in the process of making the purchase, getting an English-speaking lawyer on board is often a good idea. They will act in your best interests, and can advise on local property laws as well as acting as an interpreter where required.
This can be particularly important in countries like Spain, where it is customary for a notary to read the sale contract aloud in the native language before parties sign it. Additionally, the inheritance laws of many countries obligate you to make a will when you buy a property so that there is no dispute over who owns the property in the event of your passing.
With the right helpers on hand, navigating all these legal hurdles becomes that much easier.
Protect your money - and future happiness
A little extra effort now can save you a lot of time, stress and money later in the buying process, or even years down the line. Rushing into a property purchase is an easy way to throw money away, so always dedicate as much time as you can to the research process.
While you should always buy a property that appeals to your heart, it’s also sensible to be guided by your head and your wallet!
Currencies Direct is one of Europe's leading non-bank providers of currency exchange and international payment services. Since we were formed in 1996, we've maintained our focus on providing innovative foreign exchange and international currency transfer services to corporations of all sizes, online sellers and private individuals. We have also expanded our services to provide dynamic and pioneering "business to business" solutions to help companies, tier 2/3 banks and other non-bank financial institutions to process their international payments. Our headquarters are in the City of London (United Kingdom) and we have operations in continental Europe, Africa, Asia, and the United States. Currencies Direct is jointly owned by private equity firms Palamon Capital Partners and Corsair Capital.