Make a sunny property in Portugal yours in retirement
For many retirees in the UK, heading abroad and investing in property is an exciting way to make the most of the next stage of life.
With the value of the Pound moving around so much thanks to Brexit, it could be a great time to take advantage of any favourable movements in the market to make payments on your new overseas getaway.
Where should you buy abroad?
The world’s your oyster, but buying property abroad is a substantial investment. It’s worth doing some research into various overseas real estate markets before deciding which one is ‘the one’. A beachfront property might be the dream, but if the currency market isn’t looking too good, or hasn’t been in your favour in the past, you may need to re-think that location.
Portugal is a popular location for retirees and a hot spot for property investment. Prices of fully renovated rental properties have risen significantly, but some of the best deals can be found in renovation projects. Who knows? Maybe a fixer-upper is your next project.
If you’re not looking for a sunny retirement location, Japan is another spot where people are increasingly investing in the property market. This is likely thanks to the weakening Yen and the upcoming 2020 Olympics. There’s a lot of options, it simply depends on your personal circumstances.
Getting an international mortgage
It’s important to ensure that the location you’re looking to buy allows financing options for foreign buyers. In some countries, you may not be able to get a standard mortgage for a foreign purchase from a domestic bank the way you would for a local purchase. There are ways around ensuring you can get financing to invest in property overseas, but it’s best to consult a finance professional before taking any action.
How to save money when you buy overseas
As you do research into the best option for investing in a property overseas you’ll find out how much the exchange rates will influence your decision. Reviewing the current economic standing of a currency with charts and market news are one way to have an idea of the viability of a location.
Keep in mind however, that rates are bound to fluctuate, sometimes dramatically. Take the Pound for example, its value fell drastically in response to the Brexit vote in 2016, and many foreign investors jumped on the opportunity to grab a bargain while its value was so low.
This is similar for many places around the world. Understanding economic and geopolitical factors is a good way to understand how this influences exchange rates, and therefore your investment.
Not to mention, high exchange rate margins and transfer fees from the bank often result in a loss when transferring money overseas. When paying off a property however, every cent is valuable. One very good way to save some money is by using a money transfer service. Companies like OFX can also offer tools like a forward exchange contract, which allows you to lock in a really great rate and then transfer at a later date (say, when the down payment on your property is due).
Whether it be a sunny beachfront property in Mexico, or a cottage in the Norwegian Fjords, investing in property abroad is a great option for those looking to enjoy their hard-earned money in retirement. You’ve earned it!
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