Knowing the extra costs and preparing ahead will help reduce the stress of overseas property investing. Much of this boils down to targeted research. However, here is a brief overview of the extra costs you have to face.

Buying property overseas is both an exciting and a frightening prospect. The most frightening aspect is the cost. Most buyers are delving into relatively uncharted lands personally and knowledge-wise, hence they don't really have a 100% certainty about price. There are extra costs lurking here and there and the chief is foreign taxes. Foreign taxes represent the largest share of extra cost for foreign property buyers. It is important to get the advice of a property specialist on property taxes in your destination country. The key to successfully investing in foreign housing is knowing how to budget for extra costs. Putting money down for these extra costs will put you at ease and the remaining specs will come together smoothly.

Additional Costs To Budget For When Buying property overseas

Extra costs can be overwhelming and have the capacity to snuff the life out of your foreign property venture. Preparing ahead is your best bet. You will need to budget for the cost of travelling back and forth, annual carrying costs and in some cases, stamp duty when the property is eventually sold. And combining these costs can add up to 15% of the home's market value. In many cases, additional costs on foreign property investing will fall into these categories:

1. Mortgage Arrangement fees.

Your bank or private lender will charge a fee for arranging funds for your mortgage. These fees will vary according to your mortgage. In some cases, they will be added to your mortgage. You don't want this (so ask upfront). In which case, you will have to pay interest on that amount.

2. Property Purchase Taxes.

·         VAT (Value Added Tax): Property owners fail to take this into account. But it is mandatory in many countries. The VAT is similar to a sales tax for property owners in the United States or the goods and services tax that Canadian property owners have to pay.

·         Stamp Duty fee (on new properties in some countries) fluctuates relying upon the locale the property is in. It is calculated as the percentage of the price tag which varies but is normally in the range of 0.5% and 1.5% of the price.

·         Miscellaneous: In Spain, for instance, when purchasing a property from a private owner, Transfer Tax (ITP, Impuesto sobre Transmisiones Patrimoniales) is paid rather than VAT. The ITP rate differs from place to place, but is in the range of 6% and 10% of the purchase price. In Quebec, there is something called a welcome tax, It usually costs about 1 to 1.5% of the underlying price tag, although the cost generally depends upon the value of the property.

3. Legal fees.

Legal fees also vary from country to country. It is common for Spanish lawyers to calculate their commission for the purchase of a property based on a percentage of the purchase price of the property (generally this is 1%, subject to a minimum fee of around € 1000).

4. Notary fees and Land Registry.

These rates will also depend on the purchase price and the complexity of legal documentation. You can expect to pay around € 750 for land registration fees and € 1,000 for notary expenses.

5. Maintenance.

Beyond the issue of foreign taxes, homeowners should also plan the cost of hiring a property manager to oversee the maintenance problems and concerns of renters, especially if they plan to rent the property year-round.

By investigating all the costs associated with foreign owned property, potential buyers can focus on enjoying their home abroad without having an unexpected blow to their pockets. If a buyer does their research and saves upfront, they can eliminate stress and prevent extra costs from adding up.

In a seller's market, like the US, buyers must be prepared to do some ground work and move fast whenever they spot homes that offer what they are looking for. In a competitive market, a buyer with cash doesn't necessarily win these days. 2015 Realtytrac stats say that about a third of property buyers in the US are cash buyers. Cash might still have an advantage over mortgage but below are some more tips to create a winning offer.

Only a few sellers can reject an offer of cash but chances are you're not the only one bringing cash to the table. Hence you need other strategies when making a home offer:

1. Move fast.

Moving fast could help you win when making a home offer in a competitive market. If you’re dealing with a seller who doesn't have much time (who does?) and wants to sell fast, all you need to do is put your best foot forward and follow other steps in these article to seal the deal.

You can also offer to close quickly. A standard closing period is about 30 days. If you can close in three weeks instead, this could convince the seller to accept your offer even over one that offers more money.

2. Get a professional.

A proactive and knowledgeable agent will know what works in that community and will be able to create a winning offer fast.  A good agent will be the strongest weapon in your arsenal when in a competitive market. A knowledgeable agent will guide you through winning strategies in that competitive market that may seem crazy when you try them in a slower market.

3. Be human.

Display personality with your offer. One way to do this is by writing a letter to the seller that tells him the reason why you want to buy. Indicate a subtle feature you like about the house (which other buyers didn't notice). Other sellers will appear impersonal.

4. An earnest deposit

A substantial first deposit makes a major difference. A reasonable first deposit will be about 3% of the value of the house. A seller often takes this offer seriously and can feel positive you are focused on the stand by position this offer.

This may give you a winning edge. Submitting a pre-approval notice with the first deposit puts your offer before others by telling the owner you are serious.

5. Money talks.

Of course, the more money you can offer upfront, the better your chances. If you can afford a 30% or 40% down payment (or more), sellers will be tempted to accept your offer. And, in the long run, it will save you money on a mortgage, shortening the length of your loan and the interest you pay. You can also waive some contingencies, depending on what your agent approves.

These tips can put your offer on top of the pile. However, in a competitive market, beating the competition depends on your creativity. 

A combination of cheap mortgages and plunging prices have triggered and are still triggering investments in foreign property. 5.4 million Britons consider buying a property abroad. But buying foreign property is not easy. Many of the British folks who bought Spanish properties before the financial crisis now contend with legal battles, touting to pull their foreign property down and that dream of foreign property ownership with it. Many of those who rushed into foreign property investing have sad stories to tell. The most important advice when making an international property investment is still to take your time, do careful research and get legal advice.

Buying property abroad, where currency value favors you is a lucrative arrangement. Currently, the Pound leads the Euro by 10%, so British property buyers looking to buy in Italy, Spain, Portugal etc. would have to pay 10% less on comparable properties. It might not be worth it if you consider travel costs and other expenses. Hence, apart from knowing legal and property rules in your destination country, you should also consider how much you're going to spend and if the expenses would justify itself.

Moreover, there could be scrupulous characters you have to deal with. In property buying, you have to let your head make the decisions. More so, when buying abroad. Let's explore the five common mistakes international property investors make and how they can be avoided.

MISTAKES INVESTORS MAKE WHEN MAKING INTERNATIONAL PROPERTY INVESTMENT

1.      Lack of information.

You can easily get burned when you are not aware of the nuances and trends of your chosen real estate market. It's not just enough to research and find out the particulars of making an investment in a specific country, be aware of the mistakes specific to foreign property investors in that country. If the eager Brits of the pre-recession had been well-informed, they wouldn't have fallen into legal traps.

2.      Planning on the move.

Don't buy a house, then put together a plan later. Have a plan before you buy. This is all the more important for investors. It is the most common mistake made by newbie investors. You might spot a good deal and be prompted to make an offer quick. Don't. Make sure you form a plan beforehand and get a property that fits your investment strategy. This will keep you focused.

3.      Trying to make money quickly. Real estate, unlike stocks, is usually a long term investment. If you think you'll make a load of profit on your property within a short time, you might be setting yourself up to be disappointed.

4.      Flying solo. Professional investors always have a team. The team usually comprises of real estate agent, an appraiser, an attorney and a lender. If you want to achieve success in overseas real estate investing, don't fly solo.

5.      Paying too much. Flying solo and inadequate research most times will lead to paying too much on a property. New investors abroad usually goof up by paying too much on the properties they buy. Making this mistake will leave you working with less if you plan on buying for investment.

As much as it is lucrative, buying a home abroad is risk bound. It is always important to exercise caution when making an overseas investment deal and learn the fundamentals.