5 Additional Costs to Budget For When Buying Property Overseas

20230526052356_6470426c09f6f.webp

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.

 

Previous Post

3 Tips to Secure Financing for Foreign Property as a Boomerang Home Buyer in the US

Next Post

Follow These Tips to Sell Overseas Property Fast

Related Posts

20230526053352_647044c0d2827.webp

Buying Property Abroad 5 Crucial Questions to Ask Before Making an International Real Estate Investment

  • 25, April 2023

What’s the crucial thing when making an investment? Simple! Protect your investment. Whether you’re buying stocks or putting money down on real estate? Whether you are buying property abroad or locally? Whether you are buying overseas property for investment or just looking to relocate? You need to recognize that there are risks. Heck, buying property abroad is like running a hurdle. You’re crossing hurdles like investment restriction laws, taxation, paperwork, exchange rate changes etc. Real estate investing comes at a risk, especially when you are going into relatively uncharted territories. You need to ask yourself some crucial questions.

1.     WHY AM I BUYING THE PROPERTY?

Any decision you take subsequently will depend on this to an extent. Are you buying just to relocate or as an investor. You need to make up your mind. Your choice of mortgage, your budget and the type of insurance you go for would depend on this.

It’s easy to say I’ll move into the property for some time, get a feel of the place for a while then I’ll sell out when the market is steamy. Seems like a good strategy but guess what? Your guess may be wrong? You may have to stay with a property you don’t like for years or just bear the big loss. Hence you need to make up your mind beforehand. Am I relocating or investing?

 

2.     HOW WILL I GET FINANCING?

Financing is a big deal when it comes to buying property abroad. You can’t just carry cash around, you need to select a reputable bank in your destination to deal with. If mortgages are available by the destination bank, you need to ascertain what types of mortgages are available and what contingencies. In a case where a deposit is required by your seller, make sure that an ‘opt out clause’ is signed to make sure your deposit will be returned in case the mortgage falls through.

 

3.     SHOULD I BUY A NEW BUILD PROPERTY?

If you are buying a new construction or an off-plan property, be sure to choose the developer carefully. Ask a lot of questions. Initially, focus these questions on the agent or company itself, not the properties. Ask about customer testimonials and check what is included in their service. Ask for details in writing. You might be tempted to make a deposit on an attractive new-build property right away. Cool down and think before you leap.

 

4.     WHAT ABOUT RENTAL YIELDS?

Property specialists caution against getting sucked in by claims of developers. ‘There is huge capital growth’, ‘rental yields are off the roof’ etc.  Always remember: with big returns come big risks.

 

Don't just think about the profit to be made. Put some effort into your calculations and note that interest rates change over time, also include the tax implications of renting out your property abroad.  You should consult a tax expert or lawyer.

 

5.     WHAT WOULD BE THE ADDITIONAL COSTS?

Budget for extra costs to be between 8 - 10 % of the house value. This may often be far more in a few countries. Make sure you are, therefore, alert to the costs incurred for investing in a property in your selected country.

 

Whether you want to relocate abroad or create a global real estate investment portfolio, it's important to keep in mind that even the best strategies occasionally fall flat. You are going to therefore need an appropriate contingency plan and exit strategy, as this will lessen any inconvenience triggered and the prospect of financial loss. Hence, for those wanting to relocate, it is important to hold on to ties in your country of origin and ideally preserve a preexisting property for a predetermined time frame. Investors will also have to keep a keen eye on the global market and prevailing economic trends, as these factors may determine the necessity to sell or change strategy.

By Bebuzee Admin Read More
20230526050600_64703e3833fb5.webp

4 essential money tips when traveling overseas for work

  • 07, December 2022

Money-saving tips for work-related travel

 

Travel is exciting, whether for work or personal reasons. While traveling for work should sound stressful, strangely it usually isn't for many millennials. Add in the perk of having your trip financed by a third party, probably your company or client, and it might get way too exciting. So much so that you start dipping into your own cash reserves.

 

While you may not be the one spending the money. Traveling overseas for work presents a great opportunity to save up some cash, probably enough to travel again in the future.

 

The first step as with any frugal spending approach is to sit down with pen and paper and examine your budget; what is essential and what is trivial. What can you live without and what is crucial. Keep these four money tips in mind when next you're traveling for work.

- Consider going for cheaper accommodation. An economical option might be opting for short-term Airbnb units instead of expensive hotels. There are also services, like Homestay, which allows you to stay with a host in your destination for a reduced price. Often, you get to mix with the locals and actually experience what living in that city or country feels like. However, ensure to find out if this wouldn't be in violation of company policy.

 

- Check out cheaper airlines. You can snag a deal on flights and other essentials with a service like Lowfares that allow you to compare rates on airfares, hotels, and car rentals. Another tip is to travel during off-peak periods.

 

Generally, weekdays, especially midweek, are a great time to secure cheap rates. FareCompare CEO, Rick Seaney, in an article on USAToday https://eu.usatoday.com/story/travel/columnist/seaney/2018/01/02/best-and-worst-days-fly-2018/995658001/ , puts Jan 9 - March 16 as the cheapest times to fly through Europe. Since prices drop as much as 40% over holiday fares.

 

- Cut back on restaurants and drinks. Money spent on food per day can easily add up, especially when you're not the one spending. However, it only takes a little discipline to be thrifty and get some cash saved. One tip is to plan out what you'd eat every day and how much you want to spend. Don't get too cut up in the local cuisine, while ignoring your pocket. An advantage of a service like Homestay is that it allows you to spend little on food.

 

- Teach a language or offer a service. You can try a service like Diverbo, which will cover some of your vacationing costs and in exchange, you help locals with their English. AdventureWork shows listings of jobs in the adventure space. Folks literally pay you to teach skiing and snowboarding etc. You can also babysit or teach a language. https://www.forbes.com/sites/laurabegleybloom/2016/07/27/23-companies-that-will-help-you-travel-the-world-for-free-and-maybe-even-pay-you-to-do-it/#4e5d1881e0fd . So, if you have some free time on your hands, you can consider offering a service or volunteering.

 

There are also discount services or loyalty rewards on hotels and fares. You can take advantage of these if you frequent the same location multiple times a year.

 

Traveling overseas for work presents an opportunity to work, have fun and maybe get enough money saved up to finance your next travel.

By Bebuzee Admin Read More
20230526051144_64703f903bf81.webp

20 Highly Effective Real Estate Advertising Slogans to Get Better Results

  • 14, September 2023

A memorable real estate slogan can keep you top on the minds of prospects. Your slogan defines your business, forms an element of all your marketing materials and can be what people associate with you. For Scott Geller, a RE/MAX realtor in Jamison, Pa, with the slogan "Scott Geller, the home seller",  some people probably think his slogan is his real full name. The name and occupation awareness brought him so much business that after a while, he didn't need to advertise to the general public, he had enough repeat customers and referrals.

 

A clever, memorable slogan forms part of your identity. While a good slogan can transform your business; a bad one can harm your business and reputation. Hence you should put more effort into developing the right slogan for your real estate business. Here are a few things good real estate slogans can do for your business.

 

1. Help you appeal to customer emotions

2. Highlights your customer service or care.

3. Reflects your business's personality and character.

4. It is memorable; stays long in the mind of prospects.

Let's look at twenty great real estate slogans and some reasons why they are effective.

 

20 EFFECTIVE REAL ESTATE SLOGANS

 

One important thing slogans and taglines do is helping to distinguish you from the competition. According to Dictionary.com, a slogan is a distinctive cry that separates you from everything else. So, the most important thing you want to maintain is the individuality of your slogan. Here are 20 real estate slogans that work. You can put your creative gear in motion and use these examples to craft something effective for your real estate business.

 

1. Sell for More. Buy for less.

2. A Track record that speaks for itself.

3. The Realtor for You.

4. Turning Dreams into Reality

5. Doing Everything but the packing

6. Your Dream Home awaits.

7. Helping San Diego find where to live.

8. Experts in the local market.

9. Your concern is my priority

10. The agent that works harder after the closing papers are signed.

11. A tradition of (excellence, trust, service).

12. A cut above the rest.

13. Helping New Yorkers move since 1983.

14. I'm never too busy for your referrals.

15. Going above and beyond

16. Beautiful L.A homes

17. Helping clients get more home for less money

18. Beautiful places to live.

19. Helping you close for less.

20. Turning transactions into relationships.

 

What these slogans have in common are that:

1. They focus on the client. Your prospects do not care about you or your business. They want to know how you can help them. Having a real estate slogan that clearly states how you can help them gets you points. Keep your slogans around your clients and you'll keep them around longer.

2. Non-generic. Although you should look around and examine trends in your market and incorporate these in your real estate marketing, don't forget to differentiate yourself from the crowd. Is your slogan helping you stand out?

3. Memorable. Effective slogans have a musical memorability around them. Quality slogans are short phrases that are easily remembered.

Having a high quality real estate slogan will keep you in the minds of clients for a long time.

By Bebuzee Admin Read More