Stringent Commercial Due Diligence for Overseas Property Investors
The procedure by David Wood
The ever growing popularity along with the unregulated nature of the overseas property scene has led to the sector being flooded with potential overseas investment opportunities. While this provides a far greater assortment of developments for investors, it also presents investors with greater risks and, therefore, requires a more cautious approach.
If buying off plan from a developer then you must assure your self of the developers’ building standards, ask for details of developments already completed, better still if your visiting the area then ask to be shown around all past and completed developments and where you can, speak to those that have gone before you and purchased, ask to see testimonials from satisfied clients, ask for details of their guarantees, bank guarantees, building guarantees and such like.
Next, it is important that you have a clear idea of the buying/selling costs and the costs to finance, or to sell the property, when looking at buying property overseas. Have a clear approach and be sure that the overseas property investment you make fits in with your overall strategy.
Does the location have flexible and easily accessible financial products? The availability of mortgage products is an essential requirement of any investment strategy.
It is easy to go off track or even be side tracked when you see what looks like an absolutely fantastic deal – do be sure that it fits in with what you are trying to achieve over the next 5-20 years. Look at the historical capital growth in the area that you’re planning to buy into, the comparables in the area, rental comparables, speak to local rental agents about the occupancy rates, demand and more importantly the rental rates that are being achieved for similar properties in the same area.
If it is your aim is to make money from your overseas investment then you should probably take it that if you will get an element of free holiday time a year which will be an added bonus.
Last but not least, to avoid the pitfalls of the overseas property market, it is crucial that overseas property buyers seek independent and unbiased legal advice, which is given only in their best interests and if you have to pay a lawyer for his time and service then so be it. This type of study is fundamental and should be the basis of all property investments. But, sadly, it is all too rare in the overseas property market.
If you perform due diligence correctly you can do very nicely from overseas property investment.
About David A Wood & Associates
David A Wood is an overseas property specialist, working directly with private owners and developers in Spain the Canary Islands and Cape Verde Islands. For over 24 years, he has been instrumental in brokering the best deals between developers or private owners and those looking to buy apartments and villas in Spain the Canary Islands and Cape Verde Islands. Read More
Contact David A Wood
For more information on the properties available with David A Wood & Associates please make an enquiry on a particular property of choice or alternatively contact us using our contact details.
