How to buy property abroad
How to buy property
Buying an apartment or house abroad can be a good long-term investment. How to get what you want and not lose money?
Buying property abroad, as opposed to investing in securities or placing funds in a bank deposit, has many advantages.
The owner can live in the purchased property, rent it out to receive passive income, sell it or use it as collateral for obtaining a loan.
Determine the purpose of the purchase
Understanding why you need real estate abroad will allow you to form an action plan and, most importantly, a budget. There are four basic reasons why Ukrainians buy property in other countries.
The first is obtaining a residence permit. If a Ukrainian intends to obtain citizenship of one of the European countries, then the best way to do this is to buy real estate in one of the EU states.
In some EU countries, in order to obtain a residence permit, you need to buy real estate for a certain amount. For example, Spanish citizenship will cost at least 500 thousand euros, Greek citizenship – 250 thousand euros.
The time for obtaining citizenship is different everywhere, it can take years, but there is a faster option. For example, in Cyprus, you can move to a permanent place of residence by investing 300 thousand euros.
The second is the investment of money to save and profit from the sale. In many EU countries, you can pick up residential real estate at the price of the cost of housing. Having bought such real estate, you can not worry about a sharp drop in prices for it and save your savings from depreciation.
As in the Ukrainian housing market, abroad you can invest in both ready-made and houses under construction, having received an income of up to 25% after the commissioning of the object.
The third is the creation of a passive source of income. Renting an apartment in European countries, especially resort ones, and living in Ukraine, you can provide yourself with a normal income for life. It can also speed up the process of obtaining a foreign passport: by renting out real estate, a Ukrainian will pay taxes.
Before purchasing real estate for rent, you need to study the market in order to understand how often apartments are rented in this place.
The fourth is a place to rest. This option can be combined with the creation of a permanent source of income, and with obtaining a residence permit with further relocation. In such cases, they try to choose countries where there are famous resorts and the sun for most of the year: Spain, Turkey, Bulgaria, Cyprus, Greece.
Step 2. Selecting a country
Understanding the purpose of buying property abroad will help you choose a country. For income and recreation, states with sea coasts are better suited, where real estate can be profitably rented out.
Among the popular countries are Turkey, Bulgaria and Cyprus. In Bulgaria, there are options for one-room apartments costing from 15 thousand euros. In Turkey, prices start at 450 euros per sq. m. In Cyprus, the price for such real estate is ten times higher.
In general, you need to focus on a budget of 30-50 thousand dollars, if we are not talking about hyped Cyprus or Spain. There, the price of real estate in good condition will reach several hundred thousand dollars.
To obtain a residence permit in the EU, it is best to buy property in Hungary or Slovakia. There, prices are relatively low, and the quality of housing is much better: strict EU rules are put forward for developers. There are options in other countries, but real estate there will cost many times more.
Step 3. Finding a Realtor and Researching the Market
Buying real estate abroad usually takes place with the participation of special intermediaries – real estate agencies. The Internet is replete with advertisements that offer services in buying real estate abroad.
However, there are scammers even in civilized countries, so before using the services of an intermediary consultant, you need to study it.
Having picked up a property for purchase, it is necessary to study the nuances associated with taxes and other payments that will need to be made after the transaction. For example, in resort areas there may be a special property tax that must be paid regardless of whether it is rented out or not.
The consultant should also tell you if there are additional costs associated with drawing up a sales contract, what taxes need to be paid and when, if there are special conditions for foreigners, how the property can be used, and whether neighbors’ approval is required to purchase a home.
Do not sign any documents until their content is clear. To do this, it is better to hire a lawyer who knows the local language.
Step 4. Closing the deal and transferring money
Each country has its own rules for processing transactions. The realtor should familiarize with them before signing the contract. However, there is one common point for EU countries: payment must be made in a non-cash form.
In Germany, a special account is used to conduct a real estate purchase and sale transaction. Only a notary who draws up a contract can withdraw money from it. Usually it happens like this: the buyer transfers money to this account, the parties sign the contract, after that the responsible person makes the transfer of funds to the seller’s account. As a result, the transaction is safe for both parties.