Buying foreign property through an independent property specialist saves money
You only need to drive through the upmarket, sea-side suburb of Sea Point to see how many new developments are going up on Cape Town's Atlantic Seaboard. Sea Point is not unusual, all around the world developments are springing up in sought-after cities, ripe for investing. The trick is to know which investment properties are, in fact, good investments and which aren't. The wrong decision can be very expensive.
The safest bet when buying foreign property is to work through a reputable independent property specialist. In the end, doing so will save you money. Here are a few reasons why:
- Developers only sell their own stock.
- There are many developers out there, it's important to know which are reputable, and do good work, and which developers - and developments - to avoid.
- Many developments are not designed with the end-user in mind, meaning the units are difficult to rent out.
- Developers who have built in the less popular locations can mislead overseas buyers who aren't aware of the differences in popularity between one street and the next in certain neighbourhoods.
- Developers are under pressure to sell 'hard-to-shift' units, these units could be in otherwise popular apartment blocks. Buying the wrong apartment in a block can make it challenging to rent out.
- If you are not satisfied with your investment, recourse can be tricky as most international developers don't have a presence in South Africa.
We have seen many investors get stung by any one of those situations, turning an otherwise exciting and satisfying experience into a costly disaster.
Working through independent property specialist firms - like Hurst & Wills - can help prevent these situations as we are aligned with the buyer, not the developer. We work for you, providing you with balanced advice every step of the way.
We provide a holistic solution, highlighting the many considerations an investor should be aware of before investing offshore. Things like cross-border tax planning, structuring and capital allowances should be carefully considered as part of the larger decision-making process.
We pride ourselves on only working with reputable developers who have satisfied our own due diligence. We select those who have been in business for many years, who have successfully completed projects and whose developments achieve high occupancy. We also choose developers who have ridden the wave of difficult economic times, like the recession, and survived. Buying new property can carry financial and development risks, we've found that the better developers have good financials.
We have access to several developers across different markets, offering various types of investments. We can tailor make a shortlist of properties to suit your unique investment requirements, in-line with your own wealth strategy and objectives.
As investment property is our core business, we visit the markets and projects our clients invest in several times a year and provide regular unbiased updates on their progress.
We're also in contact with our developers regularly. We represent more than one buyer, so we have a voice with the developers we work with and can achieve quicker responses. Developers usually fly into the country, do events, sell properties and then leave. We are based in South Africa, with a head office in Cape Town and an office opening soon in Johannesburg. We do regular trips around country to facilitate face-to-face interactions with our clients, and prospective clients. We're a South African-based company so we focus on developments that will suit our South African investors.
Our experience and expertise make investing in overseas property less risky for you.
By Lisa Bathurst
International property specialist & Co-founder of Hurst & Wills
Author: Estate Living