Easier than you think to buy property abroad
With more than 15 years’ experience helping people make good property investments in the UK and Europe, international property expert and founder of Hurst & Wills Lisa Bathurst has seen it all. Here she deals with misconceptions that may be preventing you from making a sound, international investment.
Myth 1: Investing offshore is only for people with millions in the bank
There are plenty of options that cost far less than you think. We offer luxury student accommodation apartments, which are sound investments, at a total cost of R1,2m. We also have access to financing. This means that you can invest half that amount and have your tenants fund the rest, or you can purchase luxury residential buy-to-let apartments in a prime UK city.
Myth 2: I need to buy cash as I’ll never get a bond overseas
The myth here is that you need a foreign passport, or you need to earn millions of rands to get a bond abroad. We have successfully helped clients buy properties by putting down a 25% deposit with an interest rate as low as 2.5%, and having their tenants pay the rest.
Myth 3: I’m worried about exchanging money and losing out on the exchange rate
The exchange rate can be a tricky one to navigate. We recommend that our clients send their cash using a reputable FX company and send it in batches; that way you can hedge. Most of our properties can be purchased in instalments and we can assist clients with tailored payment plans. In some cases, a client only needs to send 10% overseas and then has several months, sometimes up to two years, to send the rest.
Myth 4: It’ll be difficult to find tenants and maintain when I’m so far away
All of our property investments come with hands-off, fully-managed options. Many come furnished with curtains and TVs. Most of our builds have a 10-year warranty, which solves the maintenance and fixing aspect, and we even have properties that have an annual lick of paint included. The properties can be managed by yourself or otherwise we work with partners who will vet your tenants, check them in, instruct maintenance, and collect rent.
Myth 5: It’ll be complicated from a tax perspective
We’re not tax experts so always seek your own independent advice. As a rule, however, buying a property or two overseas is simple from a tax point of view. SA has a double tax treaty with many countries, so you never pay too much tax. You may have to fill in a form at the tax services in that country, but this can often be done online or using one of our preferred partners.
Myth 6: What if I need to access the cash in my property investment?
You can bring your rental income over from overseas anytime, with a click of a button using our FX partners. Should you need a larger sum, there’s an option to refinance or mortgage the property and take out some equity.
Alternatively, selling the property should be simple enough if you bought at the right price and in the right location.
Myth 7: Student accommodation is popular, but I don’t trust students renting my property
Modern student accommodation overseas is nothing like the university accommodation we remember. The purpose-built student accommodation is a result of government initiatives to provide safe, appropriate student digs close to universities. These buildings are more like luxury flats with media rooms, rooftop gardens, coffee kiosks and laundry services. Students are prepared to pay a premium. The rent is guaranteed, and most projects include maintenance as part of the deal.