Investing in a buy-to-let abroad can be a tempting prospect. Owning your own little piece of paradise while earning a rental income can seem like a win-win scenario.
However, it’s essential to have realistic expectations about the challenges landlords face when managing a property overseas.
Here are five things to consider before investing in an overseas rental.
1) The distance factor
Managing maintenance and repairs is difficult when you live hundreds of miles away (especially if you don’t speak the local language). As a result, most landlords get an agent to manage the property for them. As you won’t be able to check what’s going on with your own eyes, you’re reliant on your agent to be true to their word.
2) Local rules
Every country has its own rules about foreign property ownership, so do your research before you commit. If you plan to live in your property for part of the year and rent it out for the rest of the time, there may be limits on how long you can stay in the country.
3) Tenant selection and communication
One of the biggest challenges long-distance landlords face is screening tenants. As it’s unlikely that you’ll be able to meet prospective tenants in person, you’ll need to rely on your managing agent’s judgement. And once they’re living in the property, communication could be problematic if the tenants don’t speak English and you don’t speak the local lingo.
4) Holiday lets
Some landlords opt to rent their property to holidaymakers on a weekly basis as they can usually charge more for short-term lets. However, as occupancy rates can fluctuate, your property could be empty for long stretches in the off-season. Also, there have been horror stories about people having their idyllic properties completely trashed by stag and hen parties, so you’ll need a clear strategy to deter troublemakers.
5) Tax implications
Always seek professional tax advice based on your individual situation. You’ll need to navigate the tax rules in the country where your property is located, as well as the UK.
Do your sums
If you’re weighing up whether to invest in a buy-to-let at home or abroad, consider your priorities carefully. While it’s impossible to guarantee blue skies and sunshine in the UK, you may find returns and occupancy rates here in Medway offer greater certainty.
Call us here at Greyfox today to discuss your buy-to-let investment plans for the future.