The pros and cons of investing abroad

Published on 14 April 2015

The pros and cons of investing in foreign real estates: what every investor needs to know before buying property abroad.

The pros and cons of investing in foreign real estates

Overseas property investment has a number of unique benefits not available to investment properties for sale in the UK. Of course, there are also a few downsides to buying property abroad, but a successful investor will be able to weigh both the pros and cons of investing in foreign real estates and make a decision based on their own, unique circumstances.

The major pro of overseas property investment

Overseas property investment has one major advantage over home or UK based portfolios: tax rebates. A UK investor who buys French property, for example, can expect to claim back up to 20 per cent of their purchase price for a new investment. Aware of this very attractive benefit, many property investment firms, including Pierre & Vacances, pre-pay this return so that their clients don’t need to wait for the administrative gears to grind. In short, an investor with a property investment company can pay the pre-tax price for a tax-valued asset.

The major con of overseas property investment

There is something to be said for ‘out of sight, out of mind’ in terms of buy to let investment. When buying property abroad, an investor has to be able to visit and maintain the property themselves, or trust that a third party is doing so. This is why it is always best to use a well-known professional service and delegate the day to day upkeep of an overseas property investment. Going for a cheaper option may seem like a great saving when things are going well, but the potential financial loss far outweighs any saving if there is an issue that impacts rental income.

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