OK, so you’ve had a fab holiday, drinking Ouzo or G&T’s and spent every day on the beach! You couldn’t help but notice a few ‘for sale’ signs for some lovely properties, perhaps ramshackle farm cottages in need of TLC or beautiful beach front penthouse apartments and villas.
And, in case you don’t step outside of the hotel to see properties for sale, all the tourist brochures seem to be full of information about “how to buy a holiday home in three easy steps†and make lots of money from renting it out to other holiday makers or selling it at a huge profit.
However, buying a home abroad isn’t:-
1. As easy as ‘one, two, three’!
2. Means you incur taxes in the UK and in the country you own the property in.
3. The same as buying and selling in the UK.
It’s easy to get caught into buying abroad, especially when it’s so wet here! However it’s worth checking out the finances of whether it’s a good idea or not.
For example, I’m looking at buying in St Lucia. I want to buy for several reasons, I:-
1. Love St Lucia and the people and would like to be able to spend a month or more there.
2. Would enjoy renting the property to friends and family so they can enjoy St Lucia too.
3. Think I have found a way of buying land and building two properties and covering my costs by selling the other.
4. Want to be able to visit there for longer periods of time when I retire (a little way away yet though!)
5. Relish the challenge of buying and building a property abroad.
Why haven’t I bought yet?
I haven’t done it yet, despite visiting there five times in the last 10 years! Why? I don’t feel I’ve done enough research yet. Every time we visit we have a good look around. When I seriously decided it was an option, we then had to work out what we could afford and what we wanted – and where.
Where should I buy?
So we spent two holidays touring the island and getting to know each of the different areas from a price perspective, but more importantly from a ‘will we fit in with the locals’ perspective.
What we worked out is we don’t want a beach front villa; I’m nervous of a hurricane wiping out my home, so I’d rather be inland and have a short drive to the beach instead.
What should I watch for?
I also wanted to really understand how property ownership worked, what the pitfalls would be of buying in St Lucia – what if oil prices go up so much I can’t fly there? What was the government’s attitude to foreigners buying? I didn’t want to end up in the same situation as other holiday home owners have when they buy and then the government changes ownership rule or finds a reason to tear the property down, as they have in Spain.
Who can I rely on?
I also needed to get to know some locals really well so that I could have people I could trust to help me understand the rules and regulations. It also meant that I have people on the ground to keep an eye on the property, or do an emergency visit if needed.
Credit Crunch and Currency Exchange!
Our last visit was an interesting one. Sterling had fallen against the Caribbean dollar, so prices had effectively increased by 25%, even though they weren’t charging anymore for properties than the year before and there were some bargains to be had.
We did find a great property in a great area, and only for £100,000. We looked at it twice for some time. However, what we really learnt was that although this property would have been lovely, my heart lies in buying some land and building a simple Caribbean style hut or two and we want to live in an area where locals can afford to buy.
Cheaper to Rent?
We also found out something even more interesting. To rent a property for a month or two didn’t actually cost anywhere near as much as we thought it would. In fact at the moment, it’s almost cheaper and certainly a lot less hassle.
So, we’ve decided not to be under any pressure to buy and build as we know that if we don’t get to do it, we can still achieve pretty much everything we want and that although we’d compromise on owning our own property, we wouldn’t have any of the risks or hassle of owning a property so far away!
Read our Top 5 things you need to know about BEFORE you even think about buying a home abroad!
Kate is one of the top property experts in the UK and regularly quoted in the press including the Telegraph, Independent, Times, Daily Mail and Express, and has appeared on BBC2, as well as featured on BBC Radio 4 and a number of local BBC Radio stations.
Kate has also been a consultant to the property sector for a number of years and is the author of a number of books, including four for Which? – Buy, Sell, Move House, Renting and Letting, Develop your Property and the Property Investment Handbook.
Contact Kate Faulkner at http://www.designsonproperty.co.uk/
