People purchase overseas property for various reasons: as a second home, as an investment opportunity, or perhaps a mixture of both. Whatever your reasons for investing in property abroad, it can be an exciting period of your life, yet it can also put several obstacles in your path.
Arguably, one of the most significant hoops you’ll have to jump through is coming up with the finances for your investment and getting them in order so that everything goes as smoothly as possible.
Whether you have your eye on a holiday home in the Maldives or an investment opportunity in Singapore, it’s essential that you are prepared to ride the ups and downs of the journey, as success can prove to be very lucrative in the end.
Yet it can be challenging to navigate a foreign property market, so we’ve created this article outlining some advice for keeping your finances orderly when investing in overseas property. From pooling your resources to enlisting the services of an advisor – here are our top tips:
Enlist The Help Of An Advisor
First, it is crucial to understand that where you plan to purchase your investment opportunity will have different ways of navigating the property purchase process than your country of origin. Some steps you’re used to might be missing and replaced with other methods you’ve never encountered before, regardless of whether you’re a seasoned or first-time property investor.
Due to this, you may feel a little overwhelmed sometimes, which can be lessened by enlisting the services of knowledgeable property advisors like the team at PropertyGuru Group. Focused on helping ex-pats and investors make sound investment choices, their website is a good resource for those who want additional help navigating the overseas property purchase process.
Equipped with specialist market tools, consider visiting their website or contacting them directly for more assistance today. Whether you need a hand wrapping your head around the financial side of things or would like to compare home loans, reach out to their team today and see how they could help you get your finances in order when purchasing overseas property.
Save Up A Large Deposit
Typically, the sooner you start saving for your property investment, the more money you’ll have to put down as a deposit. Starting the saving process as quickly as possible, as dull as it might be, is beneficial since you’re more likely to afford your investment sooner and more likely to qualify for a better interest rate. So, it’s worth thinking about your outgoings and what you can and can’t afford!
Investors or ex-pats with a larger deposit are more likely to be offered more attractive mortgage deals, so it’s worth saving up as much as possible for as long as possible. Depending on which country’s property market is calling you, it’s worth bearing in mind that you’ll need a deposit that is at least 5% of the property price, yet be prepared that you may be asked to pay more.
Take A Look At Your Credit History
Another way to get your finances in order when investing in overseas property is by looking at your credit history and ensuring everything is in order. It’s no secret that your credit history is one of the most critical factors standing between you and your dream home, as your chosen lender or broker will use it to determine how much you can borrow and if you’ll be a worthy candidate to lend to.
Put yourself in a lender’s shoes, and ask yourself the following questions:
- Is there anything in your credit history that might cause doubt for a lender?
- Do you have any inactive accounts that are still open?
- Do you regularly go into your overdraft?
- Have you applied for any additional credit recently?
- Do you pay all your monthly bills on time?
Asking yourself these questions can help give you an idea of whether you’re a worthy candidate to lend to and can give you the boost you need to fix things before approaching a lender. Although records can remain on your credit history for upwards of six years, there are many ways that you can better your credit score
Take Out A Loan
Often viewed as a last resort, taking out a loan is another way to get your finances in order when investing in overseas property. Be warned, though, that if you opt to go down this route, you will need to approach a loan provider in the country you are making the house purchase, as providers from your country of origin will not work.
Not to mention, depending on which lender or broker you approach for your property sale, they might not look too favorably on your loan even if you make payments on time! So, it is worth double-checking with them before taking out a loan to ensure you don’t get into more trouble than necessary.