People who want to make more money often invest in property.
However, more and more people are turning to buying to let abroad to make cash from holidaymakers. This may be perfect for some people, but not so perfect for others. Let’s discuss everything related to buying to let abroad and whether it’s right for you:
Reasons to invest in overseas property
There are a few good reasons to invest in overseas property. Some people are drawn in by the promise of better capital growth. Others like the idea of higher rental yields than buying to let property in the UK. Some want their own holiday home to visit when they’re not renting it out. There are a number of reasons someone may choose to buy overseas. However, there are many responsibilities and they can be harder to fulfil when the property is not in the UK.
It’s usually best to look for mortgages in more established areas, even if you find bargains in countries where prices have dropped dramatically. You will have a safer long-term investment when you do this, however tempting a bargain may be!
What to look for
The property should be in an easily accessible location, have good local amenities, and ideally be popular with tourists for you to make a good amount of money on your investment. Think about the holiday season in the area too. This will give you a good idea of what you could make.
You could even look at similar property for sale that is already being rented out and find out how much the rent is, as well as how long it is occupied for each year. This will give you a good idea of whether purchasing a property in the area is a good idea for you!
Your property must be kept to a certain standard, so make sure you bear that in mind. You will have cleaning costs and maintenance costs to consider, and you’ll want to double check that there are no restrictions on letting out to people outside of the country. Some countries do have rules and regulations on this.
To help you out, you may consider hiring a property management company. They will do the following things:
- Advertise your property
- Take enquiries
- Book rentals
- Handle problems
- Keep accurate records
- Clean the property in between lets
- Organize additional services
They can be as involved as you like them to be, so it will depend on what you can do yourself and the budget you have.
Paying tax on your rental income
You must pay tax on any rental income you receive. However, you can deduct expenses, but they must relate to your lettings business in some way. This allows you to pay a little less and make a little more, but you need to make sure you’re going the right way about it.
Buying to let abroad can be as lucrative as it sounds, providing you do your research first. The location is crucial to getting the ROI you want!