Are you intending to use an estate agent or developer when buying your property abroad? If so, it is of primary importance that you use a professional company with impeccable credentials – but how exactly how do you set about checking on that? Here are a few ideas I have put together for you:
Start by asking the developer or agent the following questions:
1. How long have you been in business? If it’s under 5 years, you might want to proceed with caution. The younger the company the higher the risk that they’re not able to
compete with the long standing companies and/or offer a complete service.
2. How many properties do you build or sell per year? From 1 – 50, they are a small developer/agent and the good developers offer a proper client service. Small companies
are easy to work with as you know exactly who to call if there is a problem. From 50 – 150, they are a medium sized developer/agent and for the most part the service is similar to the small company.
Regarding developers that build over 150 - they are considered large and can sometimes be a bit impersonal, but you can usually rest assured that they know what they’re doing! Just
make sure that you will be provided with someone that is responsible and accountable for your property and that you have their direct contact details.
3. Do you always finish your projects on time or, if a project does go past the completion date, what do you do to compensate the buyer? You don’t want a developer/agent that says the build will be completed in January and it actually finishes in May!
Make sure you investigate and find out if they stick to their word or, in the case of an agent, you want to make sure that they are recommending developers that do what they say they’re going to do. And find out how they will compensate you if timelines drag on!
4. Do you have testimonials or can I meet some of your past buyers? Ask for testimonials and/or any feedback you can from people that have already purchased from the
developer/agent.
5. What are the financial options? Most new builds start with a 5 -10% deposit and then you pay the rest in stages. Furthermore, many developers are flexible when it comes to
the amount you need to pay and when so it’s worth the time and effort to get a breakdown from each developer. When comparing different developers the financial element is
usually a key component to the decision making process.
6. What other services can you help us with? Can the developer/agent help you with mortgages, solicitors, furniture packs and so forth? And what about the after-sales package: do they help you to get your new property up and running?
Obviously the one thing that you need to do is to talk to a previous client\: chat to locals and see what the opinion seems to be. Ask them if you can speak to a previous client – and be very wary if they seem reluctant to let you do this.
I hope it all goes well for you.
Kim
The Overseas Guides Company
http://www.Overseasbuyingguide.com
Thursday 16 December 2010
Wednesday 8 December 2010
Renting your holiday home out for some extra cash?
One of my blog readers dropped me a line a few days ago. She had been thinking of buying abroad but, with the current financial conditions, she has been thinking more and more of renting. Many people are feeling the same way: I chatted about decorating your rental home abroad – here are some vital tips to remember if you ARE going to be renting your property out:
1. Think about employing someone to make sure the gardens and the pool are kept immaculate. There is nothing more off-putting than a dirty pool and a messy garden. You will need to factor in an extra cost for someone to keep on top of maintenance if you are not there to do it yourself
2. It is essential that bathrooms and kitchens are clean and well stocked. Inexpensive and easy to replace cutlery, crockery and glassware are essential in the kitchen plus toilet paper and towels in the bathroom
3. If your property is suitable for families, most now expect there to be a washing machine - and a dishwasher is necessary too. Would you want to spend half your time washing by hand or washing up after each meal when on holiday?
4. Get a decent kitchen stove. My preference is for an electric stove – people can’t leave the gas on and cause an explosion
5. When renting out, remove all objects that are precious to you. Trust me, they will be the things that get broken first – sod’s law!
6. You know how many people can stay in the house – in fact, when you rent it out you will no doubt specify this. Make sure there are enough chairs, crockery etc for the number of people that will be renting.
7. Create an area and attractions guide. You’ll want to map out where the best pubs and restaurants are plus all the unmissable walks…This is just the sort of thing that makes people return time after time
8. Throw in a welcome pack for each visitor; supply basic essentials like milk and bread together with some details of nearby shops, doctors, garages etc. Adding a bottle of the local wine costs very little but it will really impress guests. Letting agents or helpful neighbours/friends can do this for you in you are not around
9. You need to make sure that you are fully insured for visitors in your rental property
10. Always ask for testimonials and feedback. That way you can correct any shortcomings and promote your property to prospective renters.
If you want a home with these qualities already built in, then I suggest you run them by your estate agent from the beginning of your search if you have not yet bought. And if you need any just call the OGC Resource Team 0207 898 0549 - there is no cost or obligation to use our recommendations.
Kim
The Overseas Guides Company
http://www.Overseasbuyingguide.com
1. Think about employing someone to make sure the gardens and the pool are kept immaculate. There is nothing more off-putting than a dirty pool and a messy garden. You will need to factor in an extra cost for someone to keep on top of maintenance if you are not there to do it yourself
2. It is essential that bathrooms and kitchens are clean and well stocked. Inexpensive and easy to replace cutlery, crockery and glassware are essential in the kitchen plus toilet paper and towels in the bathroom
3. If your property is suitable for families, most now expect there to be a washing machine - and a dishwasher is necessary too. Would you want to spend half your time washing by hand or washing up after each meal when on holiday?
4. Get a decent kitchen stove. My preference is for an electric stove – people can’t leave the gas on and cause an explosion
5. When renting out, remove all objects that are precious to you. Trust me, they will be the things that get broken first – sod’s law!
6. You know how many people can stay in the house – in fact, when you rent it out you will no doubt specify this. Make sure there are enough chairs, crockery etc for the number of people that will be renting.
7. Create an area and attractions guide. You’ll want to map out where the best pubs and restaurants are plus all the unmissable walks…This is just the sort of thing that makes people return time after time
8. Throw in a welcome pack for each visitor; supply basic essentials like milk and bread together with some details of nearby shops, doctors, garages etc. Adding a bottle of the local wine costs very little but it will really impress guests. Letting agents or helpful neighbours/friends can do this for you in you are not around
9. You need to make sure that you are fully insured for visitors in your rental property
10. Always ask for testimonials and feedback. That way you can correct any shortcomings and promote your property to prospective renters.
If you want a home with these qualities already built in, then I suggest you run them by your estate agent from the beginning of your search if you have not yet bought. And if you need any just call the OGC Resource Team 0207 898 0549 - there is no cost or obligation to use our recommendations.
Kim
The Overseas Guides Company
http://www.Overseasbuyingguide.com
Thursday 2 December 2010
Decorating your investment home abroad to maximum effect
Times are hard, but the fact remains that hundreds of thousands of Brits own homes abroad. And as times get harder, more people are looking to recoup some of the money spent on buying not only their investment property but also that lovely holiday home that they bought in the good times.
But this is presenting a problem of its own: with many more rental properties on the market, how do you set your property apart from literally hundreds of others?
The trick is to make your property a relaxing place to escape to – a place that soothes and restores the spirit in these restless times. And how exactly do you achieve this?
For many, the choice of décor revolves around where the house is situated, but my feeling is that where ever in the world your property is, holiday makers are looking for exactly the same thing – they are looking to escape their daily life and RELAX!
Colours should be restful and unobtrusive, with walls of a neutral colour. A common theme running through the entire home, with splashes of colour in cushions and pictures, gives a restful and comforting atmosphere. If you are near the sea perhaps you could introduce a few subtle (I repeat subtle…) touches such of driftwood or sea shells carefully arranged, sea paintings etc. A property near ski resorts needs to be warm and welcoming, one in a hot and humid climate needs to be airy and laid back – but they both need to be a restful retreat from the outside world.
Cut out clutter altogether and keep things neutral and classic – which is NOT the same as bland and boring! Small touches in the right colour can make a world of difference. I subscribe to the utterly beautiful magazine ‘World of Interiors’ – to me they are inspirational. For years I have been cutting out photos of the homes that excite and delight me. I have stuck them into albums – you’ve no idea how therapeutic this is! Then later on I just have to browse through my 14 albums (I kid you not – I have just counted) and I am utterly transported and inspired.
Human nature being what it is, if something is not their own, people will take less care of it. You need a property that is easy to look after, will not date and will always look smart. The last thing you need is a home that requires high maintenance, especially as you may be doing this and from a distance. Incidentally, lots of easy-to-use cleaning equipment – things like a good, sturdy, small vacuum cleaner – will mean a better chance that your property will be looked after.
Bear in mind that strong sunlight can damage fabrics. Salt or pool water walked into the house can be especially destructive if your furniture is covered in anything less than hardy fabrics. Couch and chair covers need to be easily laundered – best case scenario are covers that can be removed and dry cleaned or laundered. Don’t be tempted to go for cheap and nasty here – it shows very quickly.
Wooden floor surfaces are great as they are easy to look after. Stone tiled or ceramic floors work well too in hot climates - people may be walking in and out, sometimes dripping water all over the floors and a floor that is easily cleaned is essential. Carpets in my opinion are a bit of a no-no.
If the climate is hot and humid you will need air conditioning plus shutters for the windows are a good idea. They keep the room darkened, are low maintenance and great for keeping rooms cool for that afternoon lie-down! Blinds are a great choice too. I must confess that I have had cool cream blinds fitted throughout my flat and curtains now seem hot and messy! You need to weigh up the chances of them getting broken however…
Your beds must be of the very best quality – there is nothing that puts people off more than an uncomfortable bed. A good quality mattress with a mandatory mattress cover is what is required.
Repeat business is the best possible kind and, if you play your cards right, you will have reliable, dependable people coming back year after year - and that’s first prize in the rental stakes.
Good luck!
Kim
The Overseas Guides Company
http://www.overseasbuyingguide.com
But this is presenting a problem of its own: with many more rental properties on the market, how do you set your property apart from literally hundreds of others?
The trick is to make your property a relaxing place to escape to – a place that soothes and restores the spirit in these restless times. And how exactly do you achieve this?
For many, the choice of décor revolves around where the house is situated, but my feeling is that where ever in the world your property is, holiday makers are looking for exactly the same thing – they are looking to escape their daily life and RELAX!
Colours should be restful and unobtrusive, with walls of a neutral colour. A common theme running through the entire home, with splashes of colour in cushions and pictures, gives a restful and comforting atmosphere. If you are near the sea perhaps you could introduce a few subtle (I repeat subtle…) touches such of driftwood or sea shells carefully arranged, sea paintings etc. A property near ski resorts needs to be warm and welcoming, one in a hot and humid climate needs to be airy and laid back – but they both need to be a restful retreat from the outside world.
Cut out clutter altogether and keep things neutral and classic – which is NOT the same as bland and boring! Small touches in the right colour can make a world of difference. I subscribe to the utterly beautiful magazine ‘World of Interiors’ – to me they are inspirational. For years I have been cutting out photos of the homes that excite and delight me. I have stuck them into albums – you’ve no idea how therapeutic this is! Then later on I just have to browse through my 14 albums (I kid you not – I have just counted) and I am utterly transported and inspired.
Human nature being what it is, if something is not their own, people will take less care of it. You need a property that is easy to look after, will not date and will always look smart. The last thing you need is a home that requires high maintenance, especially as you may be doing this and from a distance. Incidentally, lots of easy-to-use cleaning equipment – things like a good, sturdy, small vacuum cleaner – will mean a better chance that your property will be looked after.
Bear in mind that strong sunlight can damage fabrics. Salt or pool water walked into the house can be especially destructive if your furniture is covered in anything less than hardy fabrics. Couch and chair covers need to be easily laundered – best case scenario are covers that can be removed and dry cleaned or laundered. Don’t be tempted to go for cheap and nasty here – it shows very quickly.
Wooden floor surfaces are great as they are easy to look after. Stone tiled or ceramic floors work well too in hot climates - people may be walking in and out, sometimes dripping water all over the floors and a floor that is easily cleaned is essential. Carpets in my opinion are a bit of a no-no.
If the climate is hot and humid you will need air conditioning plus shutters for the windows are a good idea. They keep the room darkened, are low maintenance and great for keeping rooms cool for that afternoon lie-down! Blinds are a great choice too. I must confess that I have had cool cream blinds fitted throughout my flat and curtains now seem hot and messy! You need to weigh up the chances of them getting broken however…
Your beds must be of the very best quality – there is nothing that puts people off more than an uncomfortable bed. A good quality mattress with a mandatory mattress cover is what is required.
Repeat business is the best possible kind and, if you play your cards right, you will have reliable, dependable people coming back year after year - and that’s first prize in the rental stakes.
Good luck!
Kim
The Overseas Guides Company
http://www.overseasbuyingguide.com
Thursday 25 November 2010
Make YOUR financial plan come together
Don’t you just love it when a plan comes together? Wouldn’t it be wonderful to jet away to your place in the sun for brighter times? If only buying abroad was that easy….or is it? Well, thousands of us Brits do so every year according to the statistics – why not become one of them?
However, has the family agreed on the motive for buying? Is it a heart pounding, emotional fuelled, lifestyle purchase? Or is it a level-headed, pragmatic, money making decision? The majority of people probably want it all - the best of both worlds! However, that peaceful mountain retreat might not rent like the hedonistic beach front apartment…or should it be the city centre apartment which could rent well…but then…do you really want to stay in the business district?
Whatever motivates the purchase, there are certain principals that you should bear in mind, namely what liability are you taking on and can you afford it? With 80% of overseas purchases being mortgaged, make sure you choose the correct bank to fund your purchase. This can save you thousands in the long run. Do you need a bank that can facilitate re-finance? What about over-payments, what about off-setting income against mortgage costs? Is there a robust legal process and who should represent you? Cut costs here and you could lose the lot. Also, have you considered what type of property rents well in your chosen area: apartments or villas? These and many other factors need serious consideration upfront.
The bottom line is that all of the above involves money and lots of it, so talking to professionals is the key. This is a big commitment with big responsibilities. How does it fit into your overall financial plan? Speak with financial advisors who have overseas property experience (not all do), and are familiar with property investment strategies. Understanding the full financial commitment you are taking on, you can then feel confident that you are buying within your budget and not be in for any shocks along the way.
Your plan will only come together if you actually have one…and then stick to it! Even when buying the holiday home of your dreams the numbers must work… you must understand them, work them out in advance, and then confidently buy.
Until next time
Kim
The Overseas Guides Company
http://www.Overseasbuyingguide.com
However, has the family agreed on the motive for buying? Is it a heart pounding, emotional fuelled, lifestyle purchase? Or is it a level-headed, pragmatic, money making decision? The majority of people probably want it all - the best of both worlds! However, that peaceful mountain retreat might not rent like the hedonistic beach front apartment…or should it be the city centre apartment which could rent well…but then…do you really want to stay in the business district?
Whatever motivates the purchase, there are certain principals that you should bear in mind, namely what liability are you taking on and can you afford it? With 80% of overseas purchases being mortgaged, make sure you choose the correct bank to fund your purchase. This can save you thousands in the long run. Do you need a bank that can facilitate re-finance? What about over-payments, what about off-setting income against mortgage costs? Is there a robust legal process and who should represent you? Cut costs here and you could lose the lot. Also, have you considered what type of property rents well in your chosen area: apartments or villas? These and many other factors need serious consideration upfront.
The bottom line is that all of the above involves money and lots of it, so talking to professionals is the key. This is a big commitment with big responsibilities. How does it fit into your overall financial plan? Speak with financial advisors who have overseas property experience (not all do), and are familiar with property investment strategies. Understanding the full financial commitment you are taking on, you can then feel confident that you are buying within your budget and not be in for any shocks along the way.
Your plan will only come together if you actually have one…and then stick to it! Even when buying the holiday home of your dreams the numbers must work… you must understand them, work them out in advance, and then confidently buy.
Until next time
Kim
The Overseas Guides Company
http://www.Overseasbuyingguide.com
Wednesday 17 November 2010
Do you own a furnished holiday let or serviced apartment in the EEC?
If yes…I’ve just met with a guy that told me how you can claim up to 30% of the purchase price of the property back from the UK tax man. Or…perhaps you don’t own one yet, but you’re interested in purchasing one? Read on as this will benefit you…
Claiming money back from the UK tax authorities from a furnished holiday let is one of those things that is out there for the taking…but if you don’t know about it…the tax man isn’t going to tell you about it! In addition to owning a furnished holiday let…If you pay UK income tax from any source, whether it’s PAYE or on a self-assessment basis and you want to reclaim some or all of the tax you paid in 2008/9 and 2009/10 as well as reduce the tax you pay this year, there’s a property tax specialist that you should consider contacting.
Last week I met with John Davies – he’s the MD of a company that specialises in helping property owners to claw back money from the tax man through the use of ‘capital allowances’. Apparently, it’s your statutory right to claim Capital Allowances but if your accountant doesn’t do it for you – or if you don’t do it yourself…you’re effectively missing out on tax rebate.
Our conversation was interesting – after John told me about all the people he’s helped, I asked him why everyone doesn’t file a claim. His answer was that people just don’t know about it. So – I told him that I’d mention his service in this week’s newsletter.
There are various tick boxes that need to be ticked to make a claim and of course there’s a very specific procedure to follow…but that’s why John’s company exists. To get more information or to find out how much you might be able to claw back, fill out your details on the form located on the site listed below. IMPORTANT NOTE: To claim back tax paid in 2008/2009 you need to get your skates on - your window of opportunity clses by the end of January.
So...if you own (or are about to own) a furnished holiday let and you want to know how to claim money back from the UK tax man fill out the form on: www.hedge-tax.co.uk/opg.html
Kim Brown
The Overseas Guides Company
Have you been to the main website yet? http://www.Overseasbuyingguide.com
Claiming money back from the UK tax authorities from a furnished holiday let is one of those things that is out there for the taking…but if you don’t know about it…the tax man isn’t going to tell you about it! In addition to owning a furnished holiday let…If you pay UK income tax from any source, whether it’s PAYE or on a self-assessment basis and you want to reclaim some or all of the tax you paid in 2008/9 and 2009/10 as well as reduce the tax you pay this year, there’s a property tax specialist that you should consider contacting.
Last week I met with John Davies – he’s the MD of a company that specialises in helping property owners to claw back money from the tax man through the use of ‘capital allowances’. Apparently, it’s your statutory right to claim Capital Allowances but if your accountant doesn’t do it for you – or if you don’t do it yourself…you’re effectively missing out on tax rebate.
Our conversation was interesting – after John told me about all the people he’s helped, I asked him why everyone doesn’t file a claim. His answer was that people just don’t know about it. So – I told him that I’d mention his service in this week’s newsletter.
There are various tick boxes that need to be ticked to make a claim and of course there’s a very specific procedure to follow…but that’s why John’s company exists. To get more information or to find out how much you might be able to claw back, fill out your details on the form located on the site listed below. IMPORTANT NOTE: To claim back tax paid in 2008/2009 you need to get your skates on - your window of opportunity clses by the end of January.
So...if you own (or are about to own) a furnished holiday let and you want to know how to claim money back from the UK tax man fill out the form on: www.hedge-tax.co.uk/opg.html
Kim Brown
The Overseas Guides Company
Have you been to the main website yet? http://www.Overseasbuyingguide.com
Wednesday 10 November 2010
A Good Time To Buy Overseas?
The recent economic storm has caused a lot of uncertainty and fear. People wonder if their investments are safe, whether the price of their property will be devalued, and many ultimately query the future quality of their everyday lives.
Due to the fact that the economy is affecting everyone, chances are that if you have to sell a property at a discount, you’ll also be able to buy one at a discount (home or abroad). And if you don’t have to sell, it’s simply a matter of time before the economy will return and property values will bounce back.
But what does the economic situation mean for people wanting to buy an overseas property now? Buyers fall into three categories: Investors, Holiday Home Buyers and those Emigrating. Each category is fundamentally interested in increasing their quality of life in different ways. Investors want to make money, holiday home buyers want a 2nd home in the sun, with perhaps the option of having renters pay for the privilege and those emigrating want a new lifestyle – for example, one that provides better weather, less expenses and more enjoyment.
Although we’re in the midst of economic uncertainty it’s completely possible for all three categories to find success. Making plans to purchase overseas property in this current climate, however, is not for the faint hearted. Those adverse to risk or who get stressed easily should simply stay put and ride out the storm. Those who have a positive outlook on life and are looking for an adventure need not put their future on hold.
Investors can currently scoop up overseas properties for 40 – 50% below market value. There are a substantial amount of overseas property sellers (developers and private vendors) that must sell – and many will sell for the amount of the original loan, which could be a fraction of the property value. When picking up a seriously discounted property, an investor can sit on it until the storm passes and collect a hefty capital gain in the future.
Buyers interested in picking up an overseas pad for holidays have a huge variety of countries, properties and price ranges. The economic disturbance is affecting everyone and prices are dropping – If you’ve always dreamed of having a second home, yet thought the prices were to high, now’s your chance to get a real bargain. Provided that you’re interested in renting, it’s advised that you research areas with the highest tourism rates and the longest rental season.
As for those interested in emigrating…many plan to move abroad knowing exactly where they want to move and are passionate about their plans. Not only can buyers find a bargain property, but also they can negotiate a discount on removals, furniture, cars, and any service throughout the buying process. It is truly a buyers market - as long as you have the flexibility to go now, you’re in the driver’s seat. And rather than enduring the financial position in the UK, you can ride out the storm in sun!
It’s often been said that many people find success during crisis. Personally, I believe it’s all about attitude. If you have a positive outlook and feel inspired to take action there are opportunities everywhere. Turn off the news, stop buying the newspaper and focus on the end result you’d like to experience. Do your homework, take responsibility for your future and start a new adventure – who knows where it might take you!
Kim Brown
The Overseas Guides Company
Go to the main website at: http://www.overseasbuyingguide.com/
Due to the fact that the economy is affecting everyone, chances are that if you have to sell a property at a discount, you’ll also be able to buy one at a discount (home or abroad). And if you don’t have to sell, it’s simply a matter of time before the economy will return and property values will bounce back.
But what does the economic situation mean for people wanting to buy an overseas property now? Buyers fall into three categories: Investors, Holiday Home Buyers and those Emigrating. Each category is fundamentally interested in increasing their quality of life in different ways. Investors want to make money, holiday home buyers want a 2nd home in the sun, with perhaps the option of having renters pay for the privilege and those emigrating want a new lifestyle – for example, one that provides better weather, less expenses and more enjoyment.
Although we’re in the midst of economic uncertainty it’s completely possible for all three categories to find success. Making plans to purchase overseas property in this current climate, however, is not for the faint hearted. Those adverse to risk or who get stressed easily should simply stay put and ride out the storm. Those who have a positive outlook on life and are looking for an adventure need not put their future on hold.
Investors can currently scoop up overseas properties for 40 – 50% below market value. There are a substantial amount of overseas property sellers (developers and private vendors) that must sell – and many will sell for the amount of the original loan, which could be a fraction of the property value. When picking up a seriously discounted property, an investor can sit on it until the storm passes and collect a hefty capital gain in the future.
Buyers interested in picking up an overseas pad for holidays have a huge variety of countries, properties and price ranges. The economic disturbance is affecting everyone and prices are dropping – If you’ve always dreamed of having a second home, yet thought the prices were to high, now’s your chance to get a real bargain. Provided that you’re interested in renting, it’s advised that you research areas with the highest tourism rates and the longest rental season.
As for those interested in emigrating…many plan to move abroad knowing exactly where they want to move and are passionate about their plans. Not only can buyers find a bargain property, but also they can negotiate a discount on removals, furniture, cars, and any service throughout the buying process. It is truly a buyers market - as long as you have the flexibility to go now, you’re in the driver’s seat. And rather than enduring the financial position in the UK, you can ride out the storm in sun!
It’s often been said that many people find success during crisis. Personally, I believe it’s all about attitude. If you have a positive outlook and feel inspired to take action there are opportunities everywhere. Turn off the news, stop buying the newspaper and focus on the end result you’d like to experience. Do your homework, take responsibility for your future and start a new adventure – who knows where it might take you!
Kim Brown
The Overseas Guides Company
Go to the main website at: http://www.overseasbuyingguide.com/
Thursday 4 November 2010
Your house may be protected but are you?
Insurance is one of those things that we sometimes put off. But what you have to remember is that it’s not only about insuring our physical possessions (such as a house) but there are other types of insurance that may just save the day for your family if and when times get financially tough.
Let me explain.
Unemployment in October to December 2009 was 2.46 million, up 448,000 from this time last year. Not exactly encouraging reading - it's no wonder people are concerned about their financial security. Since the start of the recession, there's been renewed interest from some people in protection insurance policies. These come in different forms and it may just pay you to have a look at what is available.
The first thing to realise is that everybody‘s needs vary and only you can decide on what you need - or you with the help of an expert. We at the OGC often talk about the advisability of using a really good IFA (Independent Financial Advisor) to assist you here – if you need to be put in touch with someone we have a number of recommendations. These are people we have either used or sourced and carefully checked ourselves or those who have come highly recommended by other OGC readers.
The two main insurance options that may help you and/or your family financially in a time of crisis are Income Protection Insurance (IPI) and Life Insurance coverage.
What is IPI?
It is a form of cover that's designed to replace a proportion of your income should you become incapacitated and are unable to work. This might happen as the result of an accident, illness or injury or even should you lose your job. If you need to make a claim, your insurance provider will pay you a sum of money each month for however long you're out of work - or until you reach retirement age.
Should you take this out? Well, it may be best to find out if your employer covers you for this if you are employed, and what sort of sick pay you'd be entitled to in the event you had to take time off from your job. The level of salary you'd receive while ill, and the length of time you'd be paid for, may affect your decision.
If you are self-employed it may well be a very good idea. Just make sure that you read all exclusions, time frames etc. of the policy very carefully before signing – as I mentioned before my feeling would be to get professional help from someone here. The key thing to note about IPI is that it will pay out while you are still alive, perhaps providing you with an income for many years. If you are planning on buying a house and have children to educate it would mean that you would be assured of an income no matter what.
What about Life Insurance?
This is a form of protection insurance that pays out a lump sum on your death and mainly taken out by the breadwinner, one who has a family that is dependent upon them to pay the bills. This includes child care and education plus things like all, or your portion of, a mortgage on your home.
You may feel that both policies are vital and, in an ideal world, it would be great to have both. However, if you – like most people – have to decide on one or the other then it’s up to you to decide which offers the most protection for you and your loved ones.
You may find that your company really looks after you if you are sick but that there are no death benefits for your family. Or the reverse: that you get very little time off if you fall ill but that your family would receive death in service benefits from your employer if you died.
If we at the OGC Resource Centre can help in any way please just give us a phone call on 0207 898 0549 and let’s chat about it.
Kim
The Overseas Guides Company
Visit the main website at: http://www.OverseasBuyingGuide.com
Let me explain.
Unemployment in October to December 2009 was 2.46 million, up 448,000 from this time last year. Not exactly encouraging reading - it's no wonder people are concerned about their financial security. Since the start of the recession, there's been renewed interest from some people in protection insurance policies. These come in different forms and it may just pay you to have a look at what is available.
The first thing to realise is that everybody‘s needs vary and only you can decide on what you need - or you with the help of an expert. We at the OGC often talk about the advisability of using a really good IFA (Independent Financial Advisor) to assist you here – if you need to be put in touch with someone we have a number of recommendations. These are people we have either used or sourced and carefully checked ourselves or those who have come highly recommended by other OGC readers.
The two main insurance options that may help you and/or your family financially in a time of crisis are Income Protection Insurance (IPI) and Life Insurance coverage.
What is IPI?
It is a form of cover that's designed to replace a proportion of your income should you become incapacitated and are unable to work. This might happen as the result of an accident, illness or injury or even should you lose your job. If you need to make a claim, your insurance provider will pay you a sum of money each month for however long you're out of work - or until you reach retirement age.
Should you take this out? Well, it may be best to find out if your employer covers you for this if you are employed, and what sort of sick pay you'd be entitled to in the event you had to take time off from your job. The level of salary you'd receive while ill, and the length of time you'd be paid for, may affect your decision.
If you are self-employed it may well be a very good idea. Just make sure that you read all exclusions, time frames etc. of the policy very carefully before signing – as I mentioned before my feeling would be to get professional help from someone here. The key thing to note about IPI is that it will pay out while you are still alive, perhaps providing you with an income for many years. If you are planning on buying a house and have children to educate it would mean that you would be assured of an income no matter what.
What about Life Insurance?
This is a form of protection insurance that pays out a lump sum on your death and mainly taken out by the breadwinner, one who has a family that is dependent upon them to pay the bills. This includes child care and education plus things like all, or your portion of, a mortgage on your home.
You may feel that both policies are vital and, in an ideal world, it would be great to have both. However, if you – like most people – have to decide on one or the other then it’s up to you to decide which offers the most protection for you and your loved ones.
You may find that your company really looks after you if you are sick but that there are no death benefits for your family. Or the reverse: that you get very little time off if you fall ill but that your family would receive death in service benefits from your employer if you died.
If we at the OGC Resource Centre can help in any way please just give us a phone call on 0207 898 0549 and let’s chat about it.
Kim
The Overseas Guides Company
Visit the main website at: http://www.OverseasBuyingGuide.com
Wednesday 27 October 2010
Mortgages in a foreign currency – the whys and wherefores…
When I heard that you could take out a mortgage in Swiss francs to pay for a house in, say, Cyprus I was amazed. I had heard of Cypriot euro mortgages and of UK sterling mortgages…but a Swiss franc mortgage? In Cyprus? That was a new one on me!
Actually, there can be sound reasons behind this seemingly strange move. Mortgage interest rates in the UK or Cyprus are significantly higher than they are in Switzerland. You can borrow the money you need in Swiss francs, secure the debt against your house, and pay a much lower rate of interest. This applies to buying property and getting a mortgage in any country abroad.
This is all well and good, but you need to remember that there is a very good reason that not everybody does this – there are considerable risks involved – risks that people are not always made aware of.
You will own a property in Cyprus that is valued in euros, yet your mortgage is in Swiss francs, and you could be earning your income in pounds. If exchange rates move against you, you could well lose the benefit of the interest rate saving and end up owing more capital than at the outset of the mortgage.
Why? Well, you will lose out on some of your interest advantage because you will pay a premium to borrow currency from another country. True, if interest rates continued at the same rate as you borrowed at there are large savings to be made. But if interest rates increased, then you would lose a lot of the advantage gained between the foreign mortgage and the standard UK mortgage.
In these economically unpredictable times who knows what could happen? Interest rates in the EU and in Switzerland stayed stable for years but all bets are off today. Also, there is the gremlin that we know as Currency Exchange Rates. If you have travelled in the last year or so I am sure I don’t need to tell you that herein lies the most unpredictable area of risk.
Currency Exchange Rates change by the minute – sometimes quite considerably – and what you are paying for your mortgage in Swiss Francs one month may rise quite dramatically from one month to the other.
Because you borrowed in Swiss francs, the mortgage must be repaid in Swiss francs. If sterling strengthened against Swiss francs you’d literally be laughing all the way to the bank. Unfortunately this has not been the case of late…quite the opposite in fact.
Smart client Joy Wenman ruefully wrote to Charles: “Because we rely on sterling we were at first paying £1,700 sterling per quarter but now it is more like £2,500 sterling.” Quite a difference...
As Charles Purdy, director of Smart Currency Exchange, comments: “I did warn a number of clients at the time of taking out Swiss franc mortgages of the currency risk versus the interest rate benefit. Sadly I have been proved right over the years.”
Forewarned is Forearmed and it is as well to bear this in mind and to make sure that you cover yourself against any currency fluctuations.
Ms Wenman’s experience is a common one, but it need NOT have been the case. There is a way that you can ensure that the exchange rate doesn’t move against you: it is called ‘forward buying’.
When you ‘forward buy’ your currency, you are given a predetermined rate that will then remain unchanged for a predetermined time. This means that at least you will know exactly how much you are paying for the months ahead - you know the cost and don’t have to worry that it will increase.
The scenario that Ms Wenman experienced can be avoided, with the help of a little foresight and the assistance of a really good currency company.
All in all, this is not an easy decision and you need to consult the experts. A really good IFA (Independent Financial Advisor) and a relationship with a good currency exchange expert could well be worth their weight in gold! To be put in touch with recommended experts just call the OGC Resource Centre on 0207 898 0549, or call Smart Currency Exchange direct on 0207 898 0541 to discuss your currency options.
Kim Brown
http://www.overseasbuyingguide.com
Actually, there can be sound reasons behind this seemingly strange move. Mortgage interest rates in the UK or Cyprus are significantly higher than they are in Switzerland. You can borrow the money you need in Swiss francs, secure the debt against your house, and pay a much lower rate of interest. This applies to buying property and getting a mortgage in any country abroad.
This is all well and good, but you need to remember that there is a very good reason that not everybody does this – there are considerable risks involved – risks that people are not always made aware of.
You will own a property in Cyprus that is valued in euros, yet your mortgage is in Swiss francs, and you could be earning your income in pounds. If exchange rates move against you, you could well lose the benefit of the interest rate saving and end up owing more capital than at the outset of the mortgage.
Why? Well, you will lose out on some of your interest advantage because you will pay a premium to borrow currency from another country. True, if interest rates continued at the same rate as you borrowed at there are large savings to be made. But if interest rates increased, then you would lose a lot of the advantage gained between the foreign mortgage and the standard UK mortgage.
In these economically unpredictable times who knows what could happen? Interest rates in the EU and in Switzerland stayed stable for years but all bets are off today. Also, there is the gremlin that we know as Currency Exchange Rates. If you have travelled in the last year or so I am sure I don’t need to tell you that herein lies the most unpredictable area of risk.
Currency Exchange Rates change by the minute – sometimes quite considerably – and what you are paying for your mortgage in Swiss Francs one month may rise quite dramatically from one month to the other.
Because you borrowed in Swiss francs, the mortgage must be repaid in Swiss francs. If sterling strengthened against Swiss francs you’d literally be laughing all the way to the bank. Unfortunately this has not been the case of late…quite the opposite in fact.
Smart client Joy Wenman ruefully wrote to Charles: “Because we rely on sterling we were at first paying £1,700 sterling per quarter but now it is more like £2,500 sterling.” Quite a difference...
As Charles Purdy, director of Smart Currency Exchange, comments: “I did warn a number of clients at the time of taking out Swiss franc mortgages of the currency risk versus the interest rate benefit. Sadly I have been proved right over the years.”
Forewarned is Forearmed and it is as well to bear this in mind and to make sure that you cover yourself against any currency fluctuations.
Ms Wenman’s experience is a common one, but it need NOT have been the case. There is a way that you can ensure that the exchange rate doesn’t move against you: it is called ‘forward buying’.
When you ‘forward buy’ your currency, you are given a predetermined rate that will then remain unchanged for a predetermined time. This means that at least you will know exactly how much you are paying for the months ahead - you know the cost and don’t have to worry that it will increase.
The scenario that Ms Wenman experienced can be avoided, with the help of a little foresight and the assistance of a really good currency company.
All in all, this is not an easy decision and you need to consult the experts. A really good IFA (Independent Financial Advisor) and a relationship with a good currency exchange expert could well be worth their weight in gold! To be put in touch with recommended experts just call the OGC Resource Centre on 0207 898 0549, or call Smart Currency Exchange direct on 0207 898 0541 to discuss your currency options.
Kim Brown
http://www.overseasbuyingguide.com
Tuesday 19 October 2010
Bargain Hunt: getting the best deal
The worldwide recession has affected almost all aspects of our life, not the least the property market.
In some countries and regions, property prices increased astronomically in the past - a couple of years ago reports of 10 to 30 percent increases annually were normal. In many cases these increases bore no relation to the value of the property. However, despite the fact that the economy remains uncertain, it seems that demand for overseas property is still there. What has changed is that it’s now a buyer's market. Snapping up a bargain from an investor who is cutting their losses is something to be considered as property prices continue to decline across the globe.
Have you seen that TV advert where a chappie (with, I think, a Greek accent?) remonstrates with office workers because they simply can’t negotiate on prices? There is some truth in this: the Brits are renowned for their inherent politeness and inability to haggle. In today’s property market this could mean missing out on some really quite dramatic price reductions!
Both private sellers and developers alike are discounting properties while adding incentives to secure sales. Around the Mediterranean many developers are slashing prices AND sometimes throwing in white goods like air conditioners or the entire property completely furnished at no extra cost! These are the kind of deals you need to be looking for.
Many private sellers are experiencing financial difficulties having purchased off-plan property several years ago with the intention of selling for a profit on completion. There is now a surplus of new homes for sale and a lack of demand - many sellers would be more than happy to sell at a break-even price. Imagine getting a property for the price someone paid for it three years ago - it's more than possible.
Provided the owner or developer purchased the property before the ridiculous price hikes, it wouldn't be difficult for them to drastically reduce their sales price to get a quick sale – and in some cases still make a profit. Plus of course when they bring the money back to the UK they may be getting a better exchange rate on their funds, depending on what currency they are selling in and how it has fared against sterling. Effectively this means that they may sell for less than they paid and yet still get their money back - or even make a profit!
And this brings me to a very important aspect of netting yourself a bargain: the transfer of currency abroad. Many people, and at one time I numbered myself among them, are unaware that exchange rates differ dramatically between banks and really good currency companies such as Smart Currency.
Also, if you are making an offer in euros and then calculating what that will cost you in sterling on the day of your offer, you need to lock the currency in at that rate. That way you will know exactly what the property is costing you; you would be horrified to know how much some people’s cost has risen by when they have omitted this vital step. You don’t even need to have the full payment available when you do this: a currency company will reserve your exchange rate for up to a year for just a small deposit – what price peace of mind?
So - how can you get the best deal? The quick answer is to make discounted offers on a number of properties - sooner or later someone will agree to negotiate. How much should you discount on the asking price? That all depends on how eager you are to get a good deal and where you are buying.
If you're interested in investing it's absolutely paramount that you do your homework and create a strategy. If you're going to buy to sell on you need to determine the real market value - what people are prepared to pay for the property today. You also need to determine who's going to buy the property (target market) and if there is enough demand. Provided that you think you can sell the property at market value, you have to make offers way below that price point. Do your research, determine the costs associated with buying and then factor in your profit - people make a living from buying at below-market value and it can be very lucrative.
It can also be extremely expensive if done incorrectly. If you need any assistance with this please phone the OGC Resource Centre. They have all been involved in property investment and purchase for years and would be happy to share their expertise and their recommendations with you.
Bye for now and go get ’em!
Kim Brown
http://www.overseasguidescompany.com
In some countries and regions, property prices increased astronomically in the past - a couple of years ago reports of 10 to 30 percent increases annually were normal. In many cases these increases bore no relation to the value of the property. However, despite the fact that the economy remains uncertain, it seems that demand for overseas property is still there. What has changed is that it’s now a buyer's market. Snapping up a bargain from an investor who is cutting their losses is something to be considered as property prices continue to decline across the globe.
Have you seen that TV advert where a chappie (with, I think, a Greek accent?) remonstrates with office workers because they simply can’t negotiate on prices? There is some truth in this: the Brits are renowned for their inherent politeness and inability to haggle. In today’s property market this could mean missing out on some really quite dramatic price reductions!
Both private sellers and developers alike are discounting properties while adding incentives to secure sales. Around the Mediterranean many developers are slashing prices AND sometimes throwing in white goods like air conditioners or the entire property completely furnished at no extra cost! These are the kind of deals you need to be looking for.
Many private sellers are experiencing financial difficulties having purchased off-plan property several years ago with the intention of selling for a profit on completion. There is now a surplus of new homes for sale and a lack of demand - many sellers would be more than happy to sell at a break-even price. Imagine getting a property for the price someone paid for it three years ago - it's more than possible.
Provided the owner or developer purchased the property before the ridiculous price hikes, it wouldn't be difficult for them to drastically reduce their sales price to get a quick sale – and in some cases still make a profit. Plus of course when they bring the money back to the UK they may be getting a better exchange rate on their funds, depending on what currency they are selling in and how it has fared against sterling. Effectively this means that they may sell for less than they paid and yet still get their money back - or even make a profit!
And this brings me to a very important aspect of netting yourself a bargain: the transfer of currency abroad. Many people, and at one time I numbered myself among them, are unaware that exchange rates differ dramatically between banks and really good currency companies such as Smart Currency.
Also, if you are making an offer in euros and then calculating what that will cost you in sterling on the day of your offer, you need to lock the currency in at that rate. That way you will know exactly what the property is costing you; you would be horrified to know how much some people’s cost has risen by when they have omitted this vital step. You don’t even need to have the full payment available when you do this: a currency company will reserve your exchange rate for up to a year for just a small deposit – what price peace of mind?
So - how can you get the best deal? The quick answer is to make discounted offers on a number of properties - sooner or later someone will agree to negotiate. How much should you discount on the asking price? That all depends on how eager you are to get a good deal and where you are buying.
If you're interested in investing it's absolutely paramount that you do your homework and create a strategy. If you're going to buy to sell on you need to determine the real market value - what people are prepared to pay for the property today. You also need to determine who's going to buy the property (target market) and if there is enough demand. Provided that you think you can sell the property at market value, you have to make offers way below that price point. Do your research, determine the costs associated with buying and then factor in your profit - people make a living from buying at below-market value and it can be very lucrative.
It can also be extremely expensive if done incorrectly. If you need any assistance with this please phone the OGC Resource Centre. They have all been involved in property investment and purchase for years and would be happy to share their expertise and their recommendations with you.
Bye for now and go get ’em!
Kim Brown
http://www.overseasguidescompany.com
Wednesday 13 October 2010
The idea to move abroad is born – and with it comes excitement, anticipation and a renewed sense of direction
At first, there is just a small thought that sparks and we ask ourselves, “Could it be achievable?” Then a plethora of possibilities opens up. Not before long, we are enquiring about property prices, cost of living and employment. Our daydreams turn to visualisations of our possible new life overseas. We see ourselves smiling more – and enjoying life with increased vigour.
Most people have the idea and the spark, but soon lose their drive. They are the people who grow old and say, “If only.”
Then there are those who have the passion and desire to carry their plans to fruition. Regardless as to your resolve, however, there will always be times when you doubt yourself. Your excitement will allow you to make massive strides, but at some point you will stop to catch your breath and wonder if you are making the right decision.
Mrs Turner, new to the world of overseas living, explained “I spent all my spare time planning, preparing and ticking off endless lists. After a few months I felt overwhelmed – was I merely caught up in ‘living the dream’ or did I truly understand what was to come? And how could I make sure that I wasn’t making a big mistake?”
Unfortunately, there are quite a few people who return to the UK not long after an overseas move. Sometimes people repatriate due to health matters, missing family or simply missing their old way of life. Others move back because the dreams they floated on did not match the reality.
One way to ensure that you are making the right decision is to “play house” in your overseas location.
Try to make arrangements to stay in your desired location for as long as possible, be it a few weeks or a month. Then make plans to enjoy the location without being a tourist. This means rather than stay in a hotel, rent a villa or better yet, do a house swap. Instead of visiting the main attractions, check out all the things that locals do. Go grocery shopping, check out employment adverts and do everything you would normally do if you were moving from one town in the UK to another.
When Mrs Turner felt overwhelmed, she decided to book a two week trip to her future destination. Although she had spent several holidays there, she never spent the duration knowing that it would one day be called “home.”
Mrs Turner said, ‘It was the best decision I made. By spending two weeks in my future town I was able to better set my expectations. I went to the doctors, paid a visit to a community centre, made enquiries about a local art class and made sure to eat most of my meals at home. By the end of the two weeks, I realised that some of my expectations were a bit too high whereas others were too low. Overall, the holiday gave me the needed push to set me back on track.”
By giving yourself time to be a resident, rather than a tourist, you will get a more realistic idea of life in your desired location. As with Mrs Turner, time spent in your future destination may also give you even more reason to fulfil your plans.
As with all areas in the world, there will be pros and cons and without experiencing life as a local, it is very easy to make a move without knowing exactly what the negatives and positives are.
Spending time on holiday is very different from making a holiday destination a home.
During the process of playing “house”, you might want to test public transport to see how reliable it is, stroll through the area at different times of the day to listen out for noise, buy the type of groceries you normally purchase to determine if they are available and at what price – and definitely check out health services – how far away are they and will they cater to your needs?
The more you match your needs to your overseas destination, the less likely you will be to ask, “Am I making the right decision?”
Kim Brown
www.overseasguidescompany.com
Most people have the idea and the spark, but soon lose their drive. They are the people who grow old and say, “If only.”
Then there are those who have the passion and desire to carry their plans to fruition. Regardless as to your resolve, however, there will always be times when you doubt yourself. Your excitement will allow you to make massive strides, but at some point you will stop to catch your breath and wonder if you are making the right decision.
Mrs Turner, new to the world of overseas living, explained “I spent all my spare time planning, preparing and ticking off endless lists. After a few months I felt overwhelmed – was I merely caught up in ‘living the dream’ or did I truly understand what was to come? And how could I make sure that I wasn’t making a big mistake?”
Unfortunately, there are quite a few people who return to the UK not long after an overseas move. Sometimes people repatriate due to health matters, missing family or simply missing their old way of life. Others move back because the dreams they floated on did not match the reality.
One way to ensure that you are making the right decision is to “play house” in your overseas location.
Try to make arrangements to stay in your desired location for as long as possible, be it a few weeks or a month. Then make plans to enjoy the location without being a tourist. This means rather than stay in a hotel, rent a villa or better yet, do a house swap. Instead of visiting the main attractions, check out all the things that locals do. Go grocery shopping, check out employment adverts and do everything you would normally do if you were moving from one town in the UK to another.
When Mrs Turner felt overwhelmed, she decided to book a two week trip to her future destination. Although she had spent several holidays there, she never spent the duration knowing that it would one day be called “home.”
Mrs Turner said, ‘It was the best decision I made. By spending two weeks in my future town I was able to better set my expectations. I went to the doctors, paid a visit to a community centre, made enquiries about a local art class and made sure to eat most of my meals at home. By the end of the two weeks, I realised that some of my expectations were a bit too high whereas others were too low. Overall, the holiday gave me the needed push to set me back on track.”
By giving yourself time to be a resident, rather than a tourist, you will get a more realistic idea of life in your desired location. As with Mrs Turner, time spent in your future destination may also give you even more reason to fulfil your plans.
As with all areas in the world, there will be pros and cons and without experiencing life as a local, it is very easy to make a move without knowing exactly what the negatives and positives are.
Spending time on holiday is very different from making a holiday destination a home.
During the process of playing “house”, you might want to test public transport to see how reliable it is, stroll through the area at different times of the day to listen out for noise, buy the type of groceries you normally purchase to determine if they are available and at what price – and definitely check out health services – how far away are they and will they cater to your needs?
The more you match your needs to your overseas destination, the less likely you will be to ask, “Am I making the right decision?”
Kim Brown
www.overseasguidescompany.com
Thursday 26 August 2010
Renting out your property in the UK when you move abroad
Given that prices on house sales have dropped considerably in the UK, you may be wondering if your best bet may be to hang on to your property after moving abroad and then sell it later. It also means that if your move does not go according to plan you have at least not burnt your boats completely.
If you decide to keep your property and rent it out, then two more decisions are paramount:
Firstly, furnished or unfurnished?
If you are like me, then you want to take all your precious things with you. If you are like most other people, you will be delighted to leave them behind and completely refurnish abroad. First prize would of course be that you leave all your furniture in your home. You rent it out furnished and then, with the proceeds from the rental, you have enough to rent and buy new furniture abroad, and save yourself a bundle in shipping costs…but it doesn’t quite work like that.
Furnished properties need to be furnished to a very high standard, and all soft furnishings need to be certified as fire resistant. On top of that you may not get much extra rent on a fully furnished property. I know when I rented here in London the rent was the same furnished or unfurnished, so you may decide it’s not worth leaving all your treasures behind.
You do need by law to leave a few things behind for your tenants however; things like a stove, fridge, washing machine and garden tools/lawn mower if they will be looking after a garden..
Letting Agents
A letting agent will find tenants for you, arrange necessary maintenance, repairs and inspections, and generally look after your property. You’ll pay for the privilege of course – 10-15% plus VAT of the rent your tenant pay will go straight to the letting agent.
You do need to keep on top of things with your letting agent, for a number of reasons.
- Letting agents, like real estate agents, are optimists – do your own research on what properties like yours are renting for
- You need to make sure inspections are carried out, such as the annual gas safety inspection and regular (6-monthly) visits to your property by the letting agent
- You need to read the check-in and check-out reports and compare them – your letting agent will probably rely on you to highlight problems
- It can seriously affect your ability to pay your mortgage if your tenants are not making rent payments on time, or if your property is vacant for a while. Keep a contingency fund in the UK of around 3 months rent to cover such eventualities if possible. Keep in touch with your mortgage company if you do start having difficulty making payments
- A letting agent may not pursue unpaid rents with as much vigour as you would like them to – you may need to step in and sort this out. I would insist on a monthly debit order: if your potential tenants balk at this – I would look for other tenants!
- You will need to keep re-decorating your property to maintain a high standard of tenants – and remember that some tenants can do considerable damage in a short space of time
- If you do think your house may be due for some redecorating, try to arrange for a friend or family member to look over the property with the letting agent – they may give you a clearer idea of what needs to be done
- It is much better to keep a good tenant on a lower rent than it is to keep raising the rent – check-in and check-out inspections are costly, and you may have vacant periods between tenants. You’re also liable for council rates and utilities when the property is vacant. My parents lived in a rented home for years and never had the rent increased. They however carried out all maintenance and repairs and left the house in a far better state than when they had first occupied it!
- Read and understand the tenancy agreement you sign with the tenant – keep an eye especially on minimum notice periods. You can also specify a break clause, where you can ask to get the property back if you need it.
Despite the costs and hassle, most emigrants choose to use a letting agent rather than relying on relatives or friends to look after their property. There is quite a lot of paperwork involved, both for tax and ongoing things such as check-in/check-out inspections, and even to change utilities over between tenants – this could prove a nuisance for friends. There are also health and safety regulations for things such as fire alarms, extractor fans, boiler inspections, electrical inspections of appliances, and even requirements for fire escapes in some properties, all of which needs to be documented and kept up to date. There is also a lot of responsibility involved in choosing tenants and collecting rents. You don’t want to feel obliged to fly back to the UK when anything goes wrong.
You will need to let your house and contents insurer know when you are letting out your house, and may need to arrange special landlord’s insurance. The premiums may be a bit more than you are paying now, but you may be able to reduce your contents cover if you are letting your property unfurnished.
Make sure you understand the conditions of your insurance, especially if your property is going to be empty for a couple of weeks – you may need to get your letting agent to visit the property at set intervals and document their visit.
You also need to let your mortgage provider know if you are letting out your home. They may ask for a one-off extra payment or impose other conditions as they see fit.
Remember too that before you leave the UK, you’ll need to contact the HMRC to register as a non-resident landlord.
And finally, you need to make very sure that you can cover your costs with the rent you receive. The rental income needs to cover your costs such as mortgage (if applicable), insurance, maintenance, rental agency fees, change-over costs, provision for vacant periods, tax and so forth.
If you decide to keep your property and rent it out, then two more decisions are paramount:
Firstly, furnished or unfurnished?
If you are like me, then you want to take all your precious things with you. If you are like most other people, you will be delighted to leave them behind and completely refurnish abroad. First prize would of course be that you leave all your furniture in your home. You rent it out furnished and then, with the proceeds from the rental, you have enough to rent and buy new furniture abroad, and save yourself a bundle in shipping costs…but it doesn’t quite work like that.
Furnished properties need to be furnished to a very high standard, and all soft furnishings need to be certified as fire resistant. On top of that you may not get much extra rent on a fully furnished property. I know when I rented here in London the rent was the same furnished or unfurnished, so you may decide it’s not worth leaving all your treasures behind.
You do need by law to leave a few things behind for your tenants however; things like a stove, fridge, washing machine and garden tools/lawn mower if they will be looking after a garden..
Letting Agents
A letting agent will find tenants for you, arrange necessary maintenance, repairs and inspections, and generally look after your property. You’ll pay for the privilege of course – 10-15% plus VAT of the rent your tenant pay will go straight to the letting agent.
You do need to keep on top of things with your letting agent, for a number of reasons.
- Letting agents, like real estate agents, are optimists – do your own research on what properties like yours are renting for
- You need to make sure inspections are carried out, such as the annual gas safety inspection and regular (6-monthly) visits to your property by the letting agent
- You need to read the check-in and check-out reports and compare them – your letting agent will probably rely on you to highlight problems
- It can seriously affect your ability to pay your mortgage if your tenants are not making rent payments on time, or if your property is vacant for a while. Keep a contingency fund in the UK of around 3 months rent to cover such eventualities if possible. Keep in touch with your mortgage company if you do start having difficulty making payments
- A letting agent may not pursue unpaid rents with as much vigour as you would like them to – you may need to step in and sort this out. I would insist on a monthly debit order: if your potential tenants balk at this – I would look for other tenants!
- You will need to keep re-decorating your property to maintain a high standard of tenants – and remember that some tenants can do considerable damage in a short space of time
- If you do think your house may be due for some redecorating, try to arrange for a friend or family member to look over the property with the letting agent – they may give you a clearer idea of what needs to be done
- It is much better to keep a good tenant on a lower rent than it is to keep raising the rent – check-in and check-out inspections are costly, and you may have vacant periods between tenants. You’re also liable for council rates and utilities when the property is vacant. My parents lived in a rented home for years and never had the rent increased. They however carried out all maintenance and repairs and left the house in a far better state than when they had first occupied it!
- Read and understand the tenancy agreement you sign with the tenant – keep an eye especially on minimum notice periods. You can also specify a break clause, where you can ask to get the property back if you need it.
Despite the costs and hassle, most emigrants choose to use a letting agent rather than relying on relatives or friends to look after their property. There is quite a lot of paperwork involved, both for tax and ongoing things such as check-in/check-out inspections, and even to change utilities over between tenants – this could prove a nuisance for friends. There are also health and safety regulations for things such as fire alarms, extractor fans, boiler inspections, electrical inspections of appliances, and even requirements for fire escapes in some properties, all of which needs to be documented and kept up to date. There is also a lot of responsibility involved in choosing tenants and collecting rents. You don’t want to feel obliged to fly back to the UK when anything goes wrong.
You will need to let your house and contents insurer know when you are letting out your house, and may need to arrange special landlord’s insurance. The premiums may be a bit more than you are paying now, but you may be able to reduce your contents cover if you are letting your property unfurnished.
Make sure you understand the conditions of your insurance, especially if your property is going to be empty for a couple of weeks – you may need to get your letting agent to visit the property at set intervals and document their visit.
You also need to let your mortgage provider know if you are letting out your home. They may ask for a one-off extra payment or impose other conditions as they see fit.
Remember too that before you leave the UK, you’ll need to contact the HMRC to register as a non-resident landlord.
And finally, you need to make very sure that you can cover your costs with the rent you receive. The rental income needs to cover your costs such as mortgage (if applicable), insurance, maintenance, rental agency fees, change-over costs, provision for vacant periods, tax and so forth.
Tuesday 10 August 2010
How to make your overseas buying dreams come true this year
I am unabashedly a list girl, so yes: I will be making a list of how to make your property purchasing dreams come true, but there is one thing that is by far and away the most important step. You must want it enough.
I know that sounds simplistic but it is nonetheless THE most important aspect of your dream. The reality is that there will be a fair amount of work ahead and you may encounter a few problems along the way so you need have the determination to push on with your quest, but remember that countless other people have done it and you can too. Here comes that list:
I know that sounds simplistic but it is nonetheless THE most important aspect of your dream. The reality is that there will be a fair amount of work ahead and you may encounter a few problems along the way so you need have the determination to push on with your quest, but remember that countless other people have done it and you can too. Here comes that list:
- Cost: It is essential that you have a clear idea of exactly how much you wish to spend from the outset – and then that you stick to your budget. If you need a mortgage, try to get an idea as to what sort of mortgage you can get up front, and certainly know what you can afford to repay. You also need to have a good knowledge of all costs that you will incur on purchase (both the cost of the property and the purchase charges), how much you will need to spend per annum, transport costs etc.
- A Currency company: Aligned to cost is that you open an account at a first class currency company, one certainly regulated by the Financial Services Authority (FSA) under the new Payment Services Regulations 2009. When I moved countries I was unaware of the enormous savings a currency company can secure. Go to: http://www.smartcurrencyexchange.com/ for an outline as to how they can save you heaps of money. And remember: if you decide on a price to pay for your new property, and are happy with that price, it may be best to lock your currency in at that day’s rate. Certainly people who did that in early 2009 laughed all the way to the …well, currency company, by the end of the year!
- Location: You will need to decide exactly where you wish to buy: this decision will be dependent on what you are using the property for. If you think you may want to rent it out at any stage, then the location is of primary importance. For instance you will need to think very carefully about access, both by air from the UK but also the distance from the airport once there
- List your requirements: Make a thorough list of your requirements, specifying what is absolutely essential to you: 3 bedrooms, a bathroom rather than a shower (my pet requirement!) etc – and don’t be swayed, no matter how pretty the house is
- Views: Ensure that your lovely view cannot be obscured: One of my saddest memories is of a couple who bought a flat abroad with a heavenly sea view. When they next visited the property, a huge block of flats totally obscured their view – they immediately put their property on the market, with their dreams in tatters
- Reputable Estate Agents: Decent agents will happily listen to your questions and answer them as best they can (plus we can help you find those agents!). You may be able to make offers of up to 20% less than the price they are asking if the area is one that is a buyer’s market - the agents we recommend will guide you as to which these are: make use of them!
- Lawyer: Always use your own independent lawyer. If you are recommended someone once on the spot, always ask for personal references and check them
- Sign ONLY when contract checked and correct: This may seem an obvious one but in the excitement of buying your property you may overlook the importance of getting your contract correct. If you don’t fully understand everything, get the contract translated, and changed if needs be
- And finally – take your time! Do not allow yourself to be rushed into anything – it’s a huge decision and one that you will have to live with, so make sure it is the right one
If you need any help at all just phone the OGC Resource Team on 0207 898 0549 and they will gladly assist you where they can - there is currently no cost nor is there any obligation to use our recommendations at all.
Tuesday 20 July 2010
Buying an Urban vs Rural Overseas Property – what’s best for you?
There’s been quite a few times in my life where I was positively certain that I wanted a particular item or a situation to happen yet when it did, I realised it wasn’t what I wanted after all. It comes down to the wise saying, ‘be careful for what you wish for as you just might get it!’ After years of conversing with overseas property buyers one major factor that causes ‘buyers remorse’ comes from city or town folk that buy a 2nd home or emigrate to the countryside rather than a more populated area.
We all have an idea of the positives of country life – the fresh air, peace and quiet, no crime, space and freedom. Sometimes those positive thoughts, however, can cloud our rational brain causing us to ignore the negatives too! In this months article, I’ve outlined common complaints that come from people that got what they wished for, but realised it wasn’t what they really wanted after all.
Too Quiet. Readers of my France Guide, John and Susan, moved to a rural area of France last year and at first they loved the country life. It wasn’t long, however before they discovered that life became a bit too dull. Susan explained, “We used to live in a UK village that had something going on every week and we weren’t far from a city that allowed us to get our culture fix. Now that we’re in the country, we really feel this lifestyle is too quite for us.” The couple have put their country home up for sale and are looking to move into a village to find some needed noise!
Fewer amenities and those in the area cost more. One of my Cyprus readers exclaimed that he’s spending more money living in Cyprus than he did when he lived in the UK. Neil moved to the Troodos Mountains to ‘get away from the rat race and depressing UK government.’ Neil wanted to find a simple, quite life – and one that allowed him to live well off his investments. Unfortunately, the cost of his life in the countryside wasn’t what he expected. The amount charged for groceries and basic supplies were very expensive locally, so he had to take a weekly two hour drive to the closest city to stock up. Neil states, ‘I’m still happy about my decision to move – however, if I knew what I know now, I would have found a place a little less secluded – one that’s closer to a more populated area and cheaper groceries!’
Healthcare – the closest medical facility is too far! No one expects to fall ill, nor do they want to speculate what they’ll do if poor health takes over. But what if you buy a home in the country and your health takes a temporary turn for the worse? When you’re unwell, you don’t want to travel hours to the closest medical facility. A reader that moved to Italy wrote to me stating, ‘Everything was going wonderful with our new place in the sun, but then my husband had a heart attack and our lives were thrown into disarray. Thankfully, he survived the attack and is doing well now, but for the past several months we’ve needed to travel 2 hours to the closest medical facility. We never thought about medical issues when we were searching for our Italian country home, but we’re now considering moving closer to a town that can cater to my husbands needs.’
Renters don’t want to rent because our property is too isolated. The Turners purchased a second home amongst some beautiful olive groves in Greece. The property needed a bit of renovation but it wasn’t long before their overseas property ticked all the boxes – or should I say ‘most of the boxes.’ Unfortunately, it took 2 hours and 45 minutes from the airport to the property and people looking for holiday lets weren’t interested in such a long commute. The Turners have since then sold their property and found another within twenty minutes of an airport – they’re having no problem renting it out.
My one bit of advice – try before you buy! If the countryside appeals to you, rent a property for as long as you can to determine if it truly is what you wish for!
Check out http://www.OverseasBuyingGuide.com
We all have an idea of the positives of country life – the fresh air, peace and quiet, no crime, space and freedom. Sometimes those positive thoughts, however, can cloud our rational brain causing us to ignore the negatives too! In this months article, I’ve outlined common complaints that come from people that got what they wished for, but realised it wasn’t what they really wanted after all.
Too Quiet. Readers of my France Guide, John and Susan, moved to a rural area of France last year and at first they loved the country life. It wasn’t long, however before they discovered that life became a bit too dull. Susan explained, “We used to live in a UK village that had something going on every week and we weren’t far from a city that allowed us to get our culture fix. Now that we’re in the country, we really feel this lifestyle is too quite for us.” The couple have put their country home up for sale and are looking to move into a village to find some needed noise!
Fewer amenities and those in the area cost more. One of my Cyprus readers exclaimed that he’s spending more money living in Cyprus than he did when he lived in the UK. Neil moved to the Troodos Mountains to ‘get away from the rat race and depressing UK government.’ Neil wanted to find a simple, quite life – and one that allowed him to live well off his investments. Unfortunately, the cost of his life in the countryside wasn’t what he expected. The amount charged for groceries and basic supplies were very expensive locally, so he had to take a weekly two hour drive to the closest city to stock up. Neil states, ‘I’m still happy about my decision to move – however, if I knew what I know now, I would have found a place a little less secluded – one that’s closer to a more populated area and cheaper groceries!’
Healthcare – the closest medical facility is too far! No one expects to fall ill, nor do they want to speculate what they’ll do if poor health takes over. But what if you buy a home in the country and your health takes a temporary turn for the worse? When you’re unwell, you don’t want to travel hours to the closest medical facility. A reader that moved to Italy wrote to me stating, ‘Everything was going wonderful with our new place in the sun, but then my husband had a heart attack and our lives were thrown into disarray. Thankfully, he survived the attack and is doing well now, but for the past several months we’ve needed to travel 2 hours to the closest medical facility. We never thought about medical issues when we were searching for our Italian country home, but we’re now considering moving closer to a town that can cater to my husbands needs.’
Renters don’t want to rent because our property is too isolated. The Turners purchased a second home amongst some beautiful olive groves in Greece. The property needed a bit of renovation but it wasn’t long before their overseas property ticked all the boxes – or should I say ‘most of the boxes.’ Unfortunately, it took 2 hours and 45 minutes from the airport to the property and people looking for holiday lets weren’t interested in such a long commute. The Turners have since then sold their property and found another within twenty minutes of an airport – they’re having no problem renting it out.
My one bit of advice – try before you buy! If the countryside appeals to you, rent a property for as long as you can to determine if it truly is what you wish for!
Check out http://www.OverseasBuyingGuide.com
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