Due Diligence and Overseas Property Investment
April 9, 2008 by David Cowgill
Most property investors that have been active over the last few years have probably considered looking overseas in their quest for decent investment opportunities. I myself have, on countless occasions, looked into overseas property but most of the time find myself put off by what seems a very difficult and long winded process. One angle I do love the idea of is buying an overseas investment property in an area where you would enjoy holidaying but also getting the added bonus of good capital growth.
I know there are plenty of overseas opportunities out there which give you 30 days free use a year, but how strong are these as investment opportunities and should you be governed by this or not?
I think the first thing to look into is what you expect to gain out of overseas property investment?
- Medium to long term capital growth
- Rental Yield
- Buy to sell opportunity
- An investment to holiday in as well
Now if your overall aim is to make money from this overseas investment then you should probably take it that if you can get an element of “free holiday” a year it will be a bonus. As far as looking into the individual overseas investment opportunities available I will not go into specific countries now.
What I will say is that I have been investing in the UK for the last 4 years and can tell you that the tried and tested methods of spotting a good opportunity are really not that different wherever you invest. Look at the historical capital growth, the comparables in the area, rental comparables, speak to rental agents about the occupancy rate for these overseas investment opportunities.
All of these are points which are very easy to do in the UK but I think a lot of investors feel it is too hard to do the same on overseas property. If you start your due diligence with a list of points that you need to satisfy before you proceed, and not stopping until you fulfil all of these points then you shouldn’t go far wrong.
English is 2nd most widely spoken language in the world so you should be able to find someone that can help you with most overseas investments. Dig as far as you can into the history of the site you are looking at, if possible look on forums where overseas investors have purchased.
You really can do the same level of due diligence on overseas property as you can in the UK, it may take longer but it is possible. Don’t take any other person of companies word on the overseas opportunity you are looking at, remember due diligence is key!
This guest post was written by Dan Chamberlain. If you have any questions or responses to this article, please post a comment below.
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now a days investing in indian real estate then others is a good chance bcz now a day indian real estate is a growing market.
Being ripped off is one of the key worries for overseas property investors. You need to take a stance where you are prepared to walk away from a purchase and one where the developers have got to prove that the investment is safe. Placing funds into an escrow account means your half way to being safe.
Top tip; ask if they have planning permission granted on off plan developments you may find they have not even got to that stage as its cheaper to buy land without this permission.Let The buyer Beware!
Investors can help protect themselves by making sure their agent is a Certified International Property Specialist (CIPS).
[...] some great advice from The Real Estate Blog on reviewing what you expect to gain from an international real estate [...]
found last month something like freshinvest but i like it more they have very good plans see yourself https://www.twimboe.com
Good Post by Dan,
I believe property due diligence is absolutely key. without it you risk that
· your property will not get built
· your property will not actually be owned by you
· you lose all your money
Overseas Property is often promoted with nice glossy adverts and brochures – and sometimes with extravagant claims for rental and growth. Remember they almost always carry a disclaimer in the small print saying that the information within should not be relied upon for your investment decision.
The common mantra is to use an independent lawyer. A good start, but you need much more than this as I don’t believe this is anywhere near what I would call due diligence.
One final point, if you have not realized that you can almost always use a UK lawyer, let me tell you why. Many real estate agents don’t tell you because either they haven’t got a clue, are inexperienced in buying property or simply scared that the sale will be delayed or be prevented completely through legal negotiation.
I have put together a free guide to due diligence at http://www.overseaspropertytalk.com
Lance
As a California Real Estate Investor, what is the best way to own/take title to an investment property- When you will have a Buy and Hold/Rent strategy (Single Family residences? Is an LLC, Land Trust or ? better than the other.
Long time reader first time responder. I dont think you need to look over seas for these investments, we are in a buyers market in the US…LETS KEEP THE MONEY HERE!
i went to look at the twimboe.com site is interesting, as it is simular to due diligence, property is not owned by you but still gaining, will have a further look as it really attracks my interest this Real Estate investments program
Thanks Michael, for the info, i did invest in two of there plans and received my Gold bullion as promised, the beach front i already made the profit was going really fast after i paid it in full!
2 thumbs up! for Twimboe.com
Its always difficult too be so far away from your investment. Overseas may provide opportunity’s for profit but I wouldn’t feel comfortable with my distance.
Overseas property investment has many advantages. As properties are cheaper and there are some big gains to be made. But there are potential risk factors involved as well. If you balance the risk factors correctly, then you can make some good money from your investment.
This world has become a global village so investors should also get advantage of it and move around the world to earn money and enjoy also. And Malaysia and Dubai are hot cakes for overseas real estate investors now a days.
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You are providing great help to the investors through this blog. Great Job. Keep it up.
I would suggest that if anyone reading this is new to real estate and has a little investment money that they try investing in some of the emerging global economies such as Brazil.