The new hot spot or topic!

Where is it to be, Spain, Florida, Eastern Europe, South Africa, Australia, the “world” is potentially your oyster!

First of all beware, sure there are good deals, some even great, but there are also some good salesmen, some even great in their ability to sell a product that does not live up to your expectations.

Remember the rush into timeshares and the resultant headaches.

You need to identify a country where you can work with someone who fully understands the law applying to both property ownership and tenancy and speaks good English.

You need to make sure that you fully understand the laws of taxation and the pros and con's of borrowing in that country.

You need to build a reliable Power Team, who will continue to work for you efficiently and reliably, while you are back in the UK unless you intend to emigrate.

We have yet to venture overseas ourselves though we have a number of clients who have done so successfully but, in all cases, it was far from plain sailing.

It is strange that so many UK investors are rushing overseas whilst so many non UK investors are still rushing to our shores.

As with the UK, local knowledge is all important, ask yourself if the deals offered are so good why sell to Brits with all the added costs as against selling to home grown investors.

Some of the downside includes:

Loans restricted to less than 85% LTV

No Further Advance facilities to take advantage of increased values

Language barriers

Local customs, taxes & regulations

Clear Title issues

Developer stability

Currency fluctuations and exchange issues

Political risks in some of the emerging countries.

Restrictions on the type of property you are allowed to buy.

The professional investor should be able to overcome most if not all of these difficulties and overseas property should be part of any balanced portfolio.

Some of the upsides include:

Higher yields than are currently achievable in the UK

Higher capital gain potential, especially in some of the emerging countries

A nice place in the sun for holidays or retirement.

A much more friendly tax regime.

It is once again a case of doing the numbers, but, in addition, evaluating the intangible pro's & con's.

If they all stack up buy, if not stay away, don't be seduced by the sun, snow or a slick salesman.

As I have said, we have yet to venture overseas but a very reliable source of information is Jo Jaffa's range of “Secrets” titles.

My regards

David Humphreys