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Moving abroad: buying a house vs. renting

Posted by By Kirsty Parsons - November 20, 2014

House keys resizedAside from deciding where to live, one of your main concerns when moving abroad is likely to be how you go about securing your new abode – do you take the plunge and buy, or err on the side of caution and rent?

Your final decision is likely to be a result of a number of circumstantial factors – your budget for the move, the length of time you’re planning to stay, whether it’s a corporate move and your company is funding/finding your new home on your behalf, whether you’re moving alone or with family – the list can be endless.

Whatever you decide to do, you need to be prepared. So here’s what you need to know about buying a house vs. renting before you go…

Buying
If you’ve ever bought a house here in the UK then you’ll know just how much hard work the whole process is. Buying a house abroad is no different – the process can be equally as time consuming and complicated, especially if you’re trying to do it from another country.
Preparation, as always, is the key here, so make sure you follow a few simple rules to ensure the process is as smooth as possible:

  • One of the most important things to do before you enter into the buying process is to secure your visa. Or at least start the process. Being a permanent resident of the country you’re joining will make things much easier and, in some cases, is actually a requirement for buying a house in the first place.
  • Understand the tax and financial implications of buying a house in the country you’re moving to. Chances are it will be completely different to what you’re used to here. Make sure your finances are in order before you make the offer and that you have enough saved for the deposit and any other legal fees you’ll be required to pay.
  • Find a good agent to represent you. Yes, it will cost you money, but it will also save you a lot of time and stress as they’ll be able to oversee the legal proceedings and ensure all the paperwork is correct and in order.
  • The sale process can be a lot quicker in foreign countries than it is here. In some cases, once the contracts are signed and exchanged you can be in your new home within 3-4 weeks – be prepared for things to move quickly and make sure you’re able to keep up financially.
  • Property viewings can be different to what we’re used to here. In some countries, you may find that multiple viewings take place at one. You might also find that viewings are much more hands-on – you’ll be encouraged to root through cupboards and lofts and it’s usual for the owners not to be present during the viewings.

Renting
Perhaps you’re renting with a view to buy once you’re more settled, or maybe your move is short term and you’re not in the position to buy – whatever your situation, renting is a very popular choice for expats. And whilst the principals are the same elsewhere as they are here, it’s always wise to remind yourself of a few basic rules:

  • As with buying, you’ll need to at least have started the visa process for the country you’re applying to live in before you can start looking at renting. Every country will have different visa rules depending on the amount of time you’re planning to live out there for – and in some cases you may not even need a visa to be able to rent – but it’s a good idea to look into it and know where you stand just in case it’s a prerequisite for tenancy wherever you’re going.
  • Rental prices will, obviously, vary according to location. Desirable, inner-city or beach front locations will always command a higher monthly fee than ‘out-of-town’ suburbs. Make sure you pick an area that meets all the requirements you need and that the rent is reflective of that.
  • As with the UK, most international landlords will also usually require an upfront payment as well as a deposit. That’s fine if you’ve got it, but you should be also be aware that your credit rating in a new country will be viewed differently as you’re effectively starting from scratch – so having the deposit is one thing, but your landlord still might view you as a risk in the long term. To make it a bit easier, make sure you have copies of all financial documents (bank statements, pay slips, visas, passports, utility bills, and a monthly projection of your earnings), get references from all previous landlords and be prepared to undergo a credit check, which you might have to pay for.
  • Using a broker will cost you money. If you’re on a budget and have the time to do so then go about it the traditional way by scouring local newspapers and magazines, and looking on property websites.
  • Viewings might be held in slightly different ways than what you’re used to here – some landlords will hold private viewings similar to what you’re used to here while others will have what’s called an Open Day, where they’ll invite all potential applicants to view the house at the same time. This is where competition becomes extremely tough, so you’ll need to be quick in making an application for a particularly popular property
  • Make sure you know exactly what’s included in your rent. Some landlords will include utility bills, others won’t. Same goes for white goods – in some countries it’s standard for them to be included, in others you’re always expected to provide your own.
  • When you do view a property, make sure you take your time and check that everything is in good working order. Raise anything that causes you concern with the landlord – things like mould or damp, leaky taps and broken electrical goods should all be discussed. Also check out the neighbourhood and get a feel for the place and what the people are like. Never sign a contract that you’re not 100% happy with.

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Topics: Buying/Selling a House

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