How to invest in overseas property in a smart way..

How to invest in overseas property in a smart way..

Overseas property investment can be both lucrative – if you choose the right market – as well as a good way to diversify outside your home market. 

The Singapore market has traditionally been amongst the most exciting, with new locations being regularly built. Also, the large expat community means there's natively a large rental demand, offering the potential for both rental returns as well as capital appreciation. To achieve this, here are some important considerations:

1. Identify the purpose for which the property will be used

Once acquired, the property can be used for varying purposes. This can be either residential or commercial. Residential property is acquired with the intention to build a home while commercial is to be used either for rental or business purposes. Commercial property is the ideal choice when considering an investment. Identifying the purpose provides the platform to select the location to buy property. 

Prevailing income on rental property in Singapore has continued to decrease over the past years. However, this does not mean that it is not an ideal investment. The location and nature of the property are among the key features that attract tenants. Therefore, it is this choice that will determine the ability to generate returns from the investment.

2.    Find a great agent

Finding the right property overseas can be a tedious job. Lack of adequate knowledge on the desired localities and the local authority regulations among other things can hinder efforts to get the right property. 

Local property agents come in handy in providing information on available properties within a preferred area. It is important to seek out for registered and approved agents while seeking property. 

3.    Cost of the property

The cost of apartments varies widely between regions. Areas with high population and close to social amenities naturally cost more. This is an important consideration while buying overseas property. It is important to compare prices and the expected returns from the investment. Despite the drop experienced in recent years, Singapore property market is still expected by many to return to growth and in such way the prospect of reasonable returns.

4.    Viewing the property

One of the greatest mistakes in buying overseas property is buying what you do not see. It is difficult to realize what you bought is not exactly as you would have liked. For this reason, it is important to take time and view the property before making payments. In such way, you will have an opportunity to survey the locality and ascertain if it meets your projections. Agents and brokers often provide with attractive photos of the property on sale and not disclosing the faults. Taking a trip to the property location may be expensive but is worth than realization you were duped or cheated out of your money.

5.    Learn local authorities’ regulations and taxation laws

There are different laws regarding ownership of property in different jurisdictions. Learning and understanding these laws is the right way to ensure you fully adhere to the regulations required by local authorities. This applies in the same regard to taxation laws imposed on foreign investors. The local governments will demand a certain percentage in the form of tax from income generated alongside other requirements.

6.    Engage a competent contractor

One of the biggest concerns - although not necessarily justified - is finding contractors who will fully adhere to necessary standards. For this reason, it is important to engage a contractor who is fully knowledgeable and conversant with the set local regulations and building standards. 

The contractor should have the capacity to engage creativity in the construction of the property to ensure it has the potential to attract the desired income. It is important to undertake an extensive search, seek recommendations and advice when selecting the contractor. This not only ensures you get the best output but as well an opportunity to have the best possible returns from your investment.

Conclusion

Overseas property investment is a great opportunity to diversify on one’s income potential. Before acquiring such property, there is need to ensure extensive research is undertaken to identify the best investment option with guaranteed returns. This can be done easily through the assistance of agent and state bodies that provide information on  the available resources that are worth investing in.