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Investing in overseas property

Created:
2 September 2008
Written by:
Dominic Picarda

Overseas property has been one of the investment world's hottest parties in recent years. With the onset of the credit crunch, however, the hangover has set in with a vengeance. Property investors are banging their heads against the wall from Marbella to Marseilles, and from Miami to Melbourne. You may think, then, that this is a strange moment to be considering the virtues of overseas real estate. But history shows that conditions such as these can offer great opportunities to those with the vision and resources to exploit them.

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In our introductory article, we set out the case for investing in overseas property . Because houses scattered around the world aren't bought and sold in central marketplaces, as shares are, they aren't subject to the same systematic risks. This means that a Canadian lakeside retreat or a South African mansion can be great ways to diversify your other holdings. To show how you might go about assessing potential investment opportunities, we then explore two top-quality, real-life developments. Investors Chronicle property expert Claer Barrett takes us around an exclusive hotel resort in Grenada (see 'In search of the next Barbados') and takes a look at Argentina (see Stake a claim in Argentina '). As with analysing equities, the clear lesson here is to weigh up the risks along with the expected rewards.

Understanding the tax and legal systems that affect your overseas property is another essential part of being a successful real-estate investor. Our personal finance editor – who happens also to be a landlord in Turkey – emphasises the importance of having a first-class lawyer to act for you and steer you around some of the potholes on the road to overseas ownership – see 'Doing it right and avoiding pitfalls '. Finally, there's the question of how to pay for your investment. Unless you're lucky enough to be able to buy in cash, you'll have to deal with a mortgage lender in unfamiliar territory. We discuss some of the costs that many buyers fail to consider until it's too late and also show how you can eliminate exchange rate uncertainty when making your monthly mortgage repayments (see 'Paying for paradise: how to finance your overseas property ').

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