Five things to consider before buying an overseas property

Have you ever thought of investing in an apartment in the heart of London? Perhaps you're more drawn to that seaside apartment in Gold Coast, Australia?

Be it for long-term investment or as a holiday home, buying a property abroad is not as out of reach as you thought, but only if you proceed with caution and do your research before making the purchase.

“Buying a property abroad is not only a good strategy to diversifying your investment portfolio, it could bring you much more than you can imagine,” said Jazmine Goh, head of international project sales of JLL Malaysia.

Goh, who is currently leading an overseas property sales team, shares the top five things to consider before buying a property abroad with theedgeproperty.com.

1. Do your research on your target country or city.

Understanding the city or country is the foremost thing to do when you’re planning to buy a property abroad. Among the top things to research and understand are the local economy and political situation. A stable nation could lower your investment risk.

2. Aim for countries with well established laws, systems and structure.

Protect your hard-earned money by choosing countries that have well established laws, systems and structure such as the UK and Australia. Countries as such generally offer better protection to foreign property buyers.

3. Beware of the taxation system.

Taxes are often far from purchasers’ thoughts when making the decision to buy, but leaving out such an issue from your calculations could be a costly mistake. Every country has a different tax regime and most countries WILL tax foreign buyers on the properties they own locally. An understanding of both home and foreign country taxation systems could possibly help you save more than spend.

4. Let location determine the size and property type.

What's hot in Kuala Lumpur might not be hot in New York. Let the location and the market demand tell you what to buy. Demographic research is important, especially for property investors. “Maybe you can afford a landed house, but the locals might not be able to afford to rent a house. Always check what the local demand is before making a decision,” says Goh.

5. Look for the developer with a good reputation.

If you are too busy to do the demographic research, keep an eye on property developers with a good reputation and their new and upcoming launches. It could be a good indication of the local market trend, where to buy and what to buy.