The Main Reasons For Purchasing A Foreign Property

There are several broad reasons that people may have for purchasing a property from abroad. Here are some of the main ones:

• They wish to relocate to a geographical location that better suits their lifestyle, income and circumstances. For example, in the UK a surprisingly high number of people emigrate to Spain because of it’s climate, relative low cost of living and the cheaper property prices.

• They wish to purchase a foreign property as a form of financial investment. Increasingly, property investment is being touted as the “ultimate” fool-proof way of achieving long term financial gain. Some people are now even using property investment as their main financial provision for old age.

• They wish to purchase a holiday home. This is mainly for those who have the resources to purchase a property in their favourite part of the world – somewhere they enjoy visiting, perhaps where they can laze away on the beach and enjoy the fruits of a completely different environment.

• Some elderly people may wish to purchase a property abroad for retirement. Often, couples in their twilight years may find that their current life has changed dramatically. They may live in a large house (too large now the children have flown the nest), wish for a slower pace of life or may simply want to move somewhere different for health purposes (for example a less cold climate). More elderly citizens relocate than is commonly thought.

Whatever the motive, there are many advantages and disadvantages that should be considered carefully before taking the huge step to purchase a foreign property. A property is one of the biggest financial investments that an individual can make during their lifetime.

The factors that will determine where an individual buys a foreign property relates mainly to their motives for purchase. Someone who buys a property with financial gain solely in mind may not give much attention to the climate or sociological factors of a potential place. They will look at the likely capital growth and yield that the property is likely to offer.

In contrast, an elderly retired couple, one of whom has arthritis would pay very close attention to climate considerations of the region the property is in - as well as other social factors such as the lifestyle enjoyed by its citizens. Capital appreciation is not likely to be high on their agenda for choosing a retirement property.

Here are some of the considerations that should be kept in mind when deciding where to buy a foreign property:

• Language spoken – you may find the most picture perfect place in the world, but is it of much use if the buyer is unable to converse with the locals?

• Investment potential – this should be a factor not just for those who use property as an investment vehicle. It could be a very painful mistake if real estate is purchased in a location that is experiencing a horrid downturn in the property market. On this note, rental yields must also be considered.

• Socio-political issues – the crime rate, attitude towards foreigners and economic prosperity should also be taken into account. Is the town and country bustling with prosperity or is it on a downward trend? These issues often filter down and affect quality of life experienced by the general population.

• Climate – anyone who has experienced a bitterly cold London winter will have this planted firmly on their list of important factors. In fact climate is one of the major reasons cited by Brits for choosing to live in alternative countries such as Spain, Portugal, Italy and even Greece among others.

• Those who are moving but will still need to work must investigate how marketable their job skills are in their new location.

• Moving to another country can have an impact on the persons status in their home country. For example, claiming welfare and benefits may elapse by moving abroad.

• Those with children will have to investigate the availability of suitable schools.

• Different countries have different rules regarding not only tax matters but also procedures relating to withdrawing pensions. It is vital to investigate these matters thoroughly prior to making any commitments.

• Other factors such as the cost of healthcare, taxation, environmental pollution and general cost of living will also need to be given due thought before deciding on any particular location to move to.