Your overseas property purchase doesn’t need to be stopped by financing. You can apply for a mortgage. However, getting mortgage for foreign property isn’t like getting a mortgage at home. This article considers some ways to tip the balance in your favor.

Why bank financing isn't always available for overseas property

When it is available and comes with no string attached, bank financing is the best option to buy foreign real estate. But alas, it’s not usually available. In many markets, it's hard to get loans as a foreign buyer. In Colombia for example, banks don't care if you're a legal resident, as long as you're a foreign buyer, you're not getting mortgage. It's easy to see why this is so. A foreign buyer isn't tied to the country; he can up and leave at any time, taking the bank's money with him. Banks wouldn't want to take this risk. Hence the hassles of getting mortgage for foreign property. This is one of the things stopping passionate investors from traversing foreign lands.

Resident and non-resident bank financing

So, let's say bank financing is available; it most likely would come in one of the following categorizations:

Ø  Resident financing: Except for countries like Colombia, most local banks would treat your loan application as they would treat that of a citizen if you're a legal resident. You'll have to prove credit worthiness just like any citizen and may not have to go through any other process or requirements. This is called resident financing.

Ø  Non-resident financing on the other hand is difficult to secure. Wherever it is available (countries like France, US, Mexico, Panama, The Dominican Republic, Portugal and New Zealand), it comes with a number of restrictions and requirements. Also, the rate you get may not be favorable, except in France, where it's possible for a non-resident with good credit to access a 20-year mortgage at a rate of just 2.25 percent.

Tips To Get Mortgage When Buying Foreign Property

So, here are some tips to help you secure mortgage when buying foreign real estate

1. Don't go it alone.

Even professional property investors get professional assistance when buying foreign property; this could be through experienced local agents or friends. They understand that investing overseas is a much different ball game. If you're in the UK, you can seek the help of an agent selling property overseas through the following bodies:

1. The Association of International Property Professionals (AIPP) and
2. The National Association of Estate Agents International

2. Find a bank that has a presence in your country and the country in which you want to buy a property.

According to Glenn Carter, a Canadian investor who works for Condo Capital "The problem is a foreign credit score does not count for anything, it's just like having no credit score”. This means the interest rates you’ll be quoted will be that of someone with no credit. But a bank with presence in your home country will offer favorable rates. "The interest rate I was quoted from a US Bank was 9%, versus the 3% we got from a Canadian bank with branches in the US.” Carter says.

3. Get an Agreement in Principle

Before signing any contracts or paying deposit, get an Agreement in Principle. Learn more about Agreements in Principle. If you're planning on getting finance on the house, make sure this is explained in the contract, and seek an 'opt-out clause' if the loan is not agreed. This will ensure any first deposit paid is refunded.

Spending money consistently on a cash flow negative rental isn't smart. It might be time to change your strategy.

Vacation rentals are a great way to make extra income from your property investments. Short term rental provider, HomeAway https://www.homeaway.com/info/getting-started/income reports that the run-of-the-mill vacation rental property owner nets $11,000 a year.

But if you consistently have to spend rental profits on roof repairs, vacancies, regular maintenance, bad tenants etc, you probably have a cash flow negative property on your hand. And there are two approaches to dealing with this problem. You can either wait it out and hope things will somehow change or kickstart an exit strategy to move on.

While cash flow doesn't have to be a decisive factor, especially when you have a vacation rental property in an up and coming neighborhood with strong potential appreciation rates. Many times, you might be spending more than you bargained for with your rental. And the faster you discover this, the better.

This article outlines five signs of negative cash flow vacation rentals but before we proceed let's see a simple formula for measuring cash flow on an investment property:

Cash Flow = Total Income (Application fees, Rent, etc.) - Total Expenses (Monthly mortgage (if applicable); General Maintenance, Electricity, HOA, Property Management, vacancies etc.)

As a rule of thumb when buying an investment property, it is wise to set aside an emergency fund to cover at least first six months of expenses. So let's dive right in and see some of the signs to watch for.

1. High vacancy/Low occupancy rate in a location: What's the occupancy rate for your neighborhood? An important sign of a cash flow negative property is high vacancy rate in the neighborhood. According to Turnkey VR https://blog.turnkeyvr.com/much-money-can-make-vacation-rental/ specializing in the management of turnkey vacation rental homes, "Occupancy rates for vacation rentals can be all over the map. For instance, a vacation rental home in a big city might create more demand than a rental property at a seasonal location like the beach". Location is key when buying real estate, especially for investment. Hence it's wise to spend time researching a neighborhood before taking the plunge.

2. High Maintenance property: Are you doling out high monthly fees for property maintenance? Then you might be dealing with a cash flow negative property. A 30-year-old property might offer a great deal but when you have to spend considerable time and money on maintenance and fixes monthly, you have to ask yourself if it's worth it.

3. Declining Rental Property Market: How strong is the rental property market? There is a strong correlation between a thriving property market and low vacancy rates. Many times a declining rental market is a sign of underlying economic issues, most times accompanied by high unemployment rates and slow growth. Sticking around in such a neighborhood would be unwise. Unless you're confident about a significant development in the neighborhood in coming years.

4. High Property Taxes: Did property taxes go up? Taxes can get tricky, especially when you're buying as a foreigner. However, when sudden tax changes are eating up your income, then you have a negative cash flow property.

5. Problem Tenants: Are problem tenants eating up your profits? You have two options, regarding managing your rental property. You can either hire a property management company, which means more expenses but better management. Or you can just ride it solo. While this offers you the chance to take an active role with your property, dealing with problem tenants (tenants who break things, tenants refusing to pay rent or pay promptly, tenants causing disturbance etc.) is a major headache and can eat into your profits.

Hence the importance of having a screening process that's hard to bypass. However, if you deal with problem tenants a lot, it might be time to consider setting an exit strategy in motion.

You can take advantage of short-term rental cash flow with sites like HomeAway and AirBnb. While tenant turnover rates can be high in the short term, short term rentals can be profitable, especially in a popular destination such as a ski resort or beach community.

What goes on in your head when moving into a new home? Foremost, how do I turn this empty shell of a house into an inviting home that reflects my own personal style? You don't want a bland and boring house. Your new house offers a new start. You can eliminate the junk and put in new digs; you can buy that bed you've always dreamed about; or beef up the kitchen and dining area for maximum comfort and entertainment. The great thing about home decoration is that you have the chance to improve your home's appearance without spending much money. Let's look at some home design ideas for giving each room in your house a makeover.

When giving a home a facelift, sometimes simple solutions can have a big impact. Here are some inexpensive home design ideas to give rooms a new lease of life.

1. Don't rush. You need to take a little time before starting major decor projects in your new home. Take some time to let in the feel and observe what the home needs before buying major stuff. HGTV recommends staying in the house for two months before making significant purchases. You might be spending money on the wrong areas. For example, instead of spending $5,000 on revamping and putting new features in your bathrooms, you might find out that you could spend half the price to get your bathroom in great shape.

2. Add color to walls. For people who get out early, a light shade will do while a deep tone will make the house more homely for those who spend more time indoors. You can also make a statement with a feature wall. Adding a lick of paint to your walls is an inexpensive way to give your room an instant lift. Whether you decorate your entire room in an intense shade or opt for a stylish two-toned plan, fresh color on your walls guarantee oodles of glamor.

3. Pare down. Now it's time to reassess and evaluate what works and what doesn't. Don't pack everything from your old home over. You don't really need everything you've accumulated. They will only make rooms stuffy. Having a new house gives you chance to try out a fresh approach. This means you can pare down on tired pieces that will only clutter up your space. You can sell these items off on eBay or drop them off at a charity shop.

4. Use right lighting. Transform the mood of rooms at a cheap price with the right lighting. You can also invest in dimmers to switch from bright to low lighting. When decorating bathrooms, try out stylish lights. For bedrooms, buy a fresh shade for lamps. You can give your room a cohesive style with stylish lighting.

5. Update roller blinds. Whether you go for a subtle floral pattern or statement stripes, roller blinds for your windows are great low-cost, high impact options for designing rooms. They can transform your dull windows and complement other designs in your room.

Less is often more when decorating and less is also eco-friendly. No matter how small your space, you can always let your creativity shine through.