PENINSULA | WHAT THE MEDIA SAYS999TODAY

PROPERTY CHANNEL 18/09/2006

While buy-to-let investment in the

UK is finally dwindling after ten years of

success, wise investors are continuing to

look overseas for the next pot of gold.

Buying abroad is easier than ever

for Brits, with the strong pound and

soaring UK houses prices making it

increasingly affordable. Many buyers

hope to help cover the costs by renting

out their property to holidaymakers or

locals, with a buy-to-let mortgage.

However, experts are warning that

buyers should tread carefully in volatile

markets such as Turkey, Bulgaria and

Dubai, where property schemes often

leave buyers out of pocket two or three

years sown the line. Such schemes offer

guaranteed rentals for the first year or

two, but the rent do not necessarily

reflect post guaranteed yields. Buying

(before the property is built ) is an

increasingly popular way to buy quality

property at bargain prices with high

potential profit margins.

Whi le over development has

cooled more established markets

cooled more established markets such

as Spain’s Costa del Sol, investment

in less saturated Spanish markets like

Granada, Jerez, Almería or Málaga

are becoming increasingly lucrative for

sure that you find an established lawyer

who can speak fluently in your language.

You must also budget for insurance,

maintenance, property management

fees, service charges and tax.

Common sense dictates that an

attractive, family sized property near a

beach, golf course and local amenities

will produce better yields than a one

bed rundown squat 30km from the

nearest shop. A local airport is a must

if you are rending to foreigners and

proximity to a golf course will extend

rental periods into the winter months.

Consider carefully how you will find

your tenants. Many investors use a local

holiday lettings or management agency,

which advertise for tourists and handle

the bookings. Renting out to locals is an

easy option depending on your property

type, as these tenants will usually stay

for longer periods.

A little common sense goes a long

way when buying. Do plenty of research

to make sure you stay ahead of the

game and have a clear idea of what

you want and how much you want to

spend before you begin your property

hunt. If you are buying with the sole

purpose of letting, clear thinking can

save you a lot of money.

buy-to-letters. Bear in mind however

that property markets can be fickle and

exotic locations are prone to going in

and out of fashion. Bulgaria is a typical

example of this, according to the latest

figures.

One of the most straightforward

ways to buy abroad is to raise the cash

against your property in the UK. Is that

isn’t possible, a number of Spanish

lenders will offer you mortgage.

If buying in the euro zone, you

could get lower rated by going to the

overseas lending arm of the UK bank.

Regarding taxes, rental income

may be taxed locally. Some countries

charge a wealth tax simply for owning

a property, while most charge capital

gains tax on any profit when you sell.

UK residents may also face UK income

tax on any rental earnings, plus capital

gains tax. The UK has a double taxation

treaty with a host of countries, which

means you shouldn’t have to pay tax

twice but this is a complex area and

you will need specialist advice.

Before you shell out for your bargain

property make sure you have some

spare cash set aside for estate agency

and legal costs and local taxes. Never

try to cut corners on legal costs and make

Big bucks in buy-to let?