Be safe not sorry – stringent commercial due diligence for overseas property investors

The ever growing popularity along with the unregulated nature of the overseas property scene has led to the sector being flooded with potential overseas investment opportunities. Whilst this provides a far greater assortment of developments for investors, it also presents investors with greater risks and, therefore, requires a more cautious approach.

If buying off plan from a developer then you must assure your self of the developers’ building standards, ask for details of their existing and completed developments, (look at their past and track record) better still if your visiting the location then ask to be shown around any past and completed developments and where you can speak to those that have already purchased, don’t be afraid to ask the developer for  testimonials from satisfied clients that have already purchased, ask for details of their bank guarantees, building guarantees and such like.

Next, it is important that you have a clear idea of the buying and selling costs and the costs involved in financing the purchase, the costs involved to sell the property. Have a clear approach and be sure that the overseas property investment you make fits in with your overall strategy.

Does the location have flexible and easily accessible financial products?  The availability of mortgage products is an essential requirement of any investment strategy. 

It is easy to go off track or even be side tracked when you see what looks like an absolutely fantastic deal – do be sure that it fits in with what you are trying to achieve over the next 5-20 years.  Look at the historical capital growth in the area that you’re planning to buy into, the comparables in the area, rental comparables, speak to local rental agents about the occupancy rates, demand and more importantly the rental rates that are being achieved for similar properties in the same area.

If it is your aim is to make money from your overseas investment then you should probably take it that if you will get an element of free holiday time a year which will be an added bonus. 

If you do buy to let your property then have a look here at my web site http://www.dwood-property.com and see how you can list your property for rent for FREE! We will even make sure that you receive all rental enquiries direct to your personal email account, and you can list any type of property in any location.    

Last but not least, to avoid the pitfalls of the overseas property market, it is crucial that overseas property buyers seek independent and unbiased legal advice, which is given only in their best interests and if you have to pay a lawyer in Spain for his time and service then so be it. This type of study is fundamental and should be the basis of all property investments. But, sadly, it is all too rare in the overseas property market.

If you perform due diligence correctly you can do very nicely from overseas property investment.

As I always said to my staff as well as my personal clients “treat property as you would the stock market, prices can come down as well as go up” and make sure you buy for the right reasons and at the right price!