Investors looking to buy a property abroad are being warned to ignore the hype and look out for dodgy paperwork by overseas property experts.
Property Secrets say UK buyers are still making “fundamental mistakes” when investing in a property abroad.
“The perception that a property located near to a beach equals a safe and profitable investment incredibly still prevails,” said Neil Lewis, head of Property Secrets.
“A case in point is Bulgaria, where in the past year there’s a massive oversupply of beach-front property on the Baltic Coast standing empty and unsellable – yet UK investors continue to buy.“This highlights a real lack of strategy. Investors have made their purchases without due care and attention to the coast’s poor rental and resale markets. This then guarantees a limited and totally inflexible exit strategy.”Mr Lewis also warned British property buyers to look at the additional cost and problems with the paperwork involved.
Mr Lewis also warned British property buyers to look at the additional cost and problems with the paperwork involved.“Investors are often left in the dark over the contracts they sign due to inconsistent translation and subjective interpretation. This results in hidden costs, less than air-tight contracts and no control over issues like indexation.”
Over-hyping from property investment companies was also a factor buyers should be wary of, Mr Lewis advised.
“In 2005, we warned against investing along the Bulgarian coast and ski resorts. When there’s as much hype as seen about Bulgaria, my advice would be to show caution and conduct comprehensive research and due diligence before committing.”
Property Secrets top tips when buying homes overseas are to weigh up the “soft” and “hard” factors.
Hard factors include the country’s economy and infrastructure, whereas soft factors are not fact-based, and include the feel of the location, the name and reputation of the development.
“We find that the ‘soft’ factors are the ones most hyped – such as a potential bid for a major sporting event or the perception of a district amongst the local market – and it is this that highlights any gaps in research.“My advice would be to conduct detailed research into the ‘hard’ and ‘soft’ factors that make a good investment great.”
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