Common buying problems

On numerous television programmes, it is portrayed as an exciting and potentially lucrative process. But buying a home abroad is full of pitfalls that are rarely mentioned by TV presenters.

TV programmes such as A Place in the Sun and No Going Back have 'fuelled our obsession' with overseas property by making it look easy. The programmes can be very alluring. You sit down at home with your cup of coffee and the rain outside and they show all these fabulous places costing £40,000. It's very tempting.

The programmes are all about pretty pictures and lovely times sitting on the terrace with a glass of wine in the sunshine. They don't go into the complexities of it.

Official figures show that about 260,000 Britons own a foreign property. The number has risen nearly 50 per cent since 2000 and it shows no signs of slowing down, according to the Office for National Statistics.

Spain, France, Florida, Portugal and Italy are established destinations for British buyers, while Croatia, Turkey and Morocco are growing in popularity.

The majority of buyers are in their late 40s and 50s and are planning to retire to their new home, or at least to use it for six months every year when they stop work. Until they reach retirement, they hope to rent it out but still use it for holidays.

However, many people get into terrible problems - and risk a fortune - by buying in a foreign country without following even the basic rules.

 Avoiding pitfalls

Use the following checklist to avoid all the common pitfalls:

• Visit before you buy
  A lot of people trust the agent's word, and commit to buy a property in a property without visiting it first. You investment is important, so look around the area carefully, talk to other rental owners to see what the likely yield will be. Many buyers fail to realise that it may not be possible to get as much rental income as expected
• Always use a lawyer
  Buying in a foreign country is at best, a complicated affair, so always engage a lawyer who if fluent in the language and laws of the country you are buying in, and who can explain it all to you in English. Using a reputable legal company will help avoid buying properties without title deeds, demolition orders or perhaps a neighbouring plot of land is scheduled for high-rise development!
• Get a structural survey
  Always get advice from a professional local surveyor. They will know the local planning laws, and can advise on any planned alterations you may require.
• Check local laws
  Some areas have local laws which may prevent you from letting your property for short periods. A short-term rental ban could ruin you plans to let you property for less than 30 days. Get your lawyer to check the small print for properties in self-contained resorts or complexes, as these are most likely to have restrictions.
• Keep renovation realistic
  If you buy a 'Character' older property, and expect to renovate it at a budget price, get estimates first. Many buyers are drawn in to the dream of creating their dream property, but end up chasing builders who don't keep to the schedule, and doing this from the UK can be very time consuming and expensive. If you want to let your property, you may not get any income for many months (or years). 
• Research the area
  What is the local area like? Check crime statistics, local people may be less well off and not take to kindly to their foreign guest's movements. If the property is in an upper coming rental market, what is the political situation like? You may find renters have to get visas if outside the EU, so limit the desirability.
• Do the maths
  What yield do you expect to make? If you have bought a property for £100,000, you should aim for a £7,000 - £8,000 annual income. Usually, around 4-5% net is considered viable, bearing in mind you will need to achieve 7-8% gross to realise that figure net. Don't price your tariff out of the market!

 Remember

No matter how cheap an overseas property may first appear, it will almost certainly turn into a big financial commitment.