- Maxine Smith
How Buying a Second Property Abroad Can Significantly Improve Your Lifestyle
Buying a property in another country is not as unthinkable as some people make it out to be. Like anything else, when spending money you need to do your homework. Things like researching the opportunity, investigating the options, covering the practicalities, having a clear idea of costs etc., these are all key components to creating a success business plan. This type of property acquisition is what we refer to as a ‘live’ investment. There are many types of investments one can consider when it comes to property acquisition abroad. For this article, we are referring to the following:
Owning a home in the sun
Owning a home in a unique and exclusive setting – African Safari
Low personal occupancy – not intending to have high occupancy of this home (periodic use only)
Let us explain,
To acquire a property that is (1) not in your base country and (2) not your primary place of residence; requires a range of support and protection assurances. These are realised in the following requirements:
These four factors are particularly applicable in foreign real estate portfolios as this requires hands-on property management and property services. Only then will it be possible for you to enjoy the benefits of acquiring a diverse property portfolio, increasing your net worth, and acquiring a lifestyle opportunity; all of this whilst having the comfort in knowing your investment is working for you without the need of your time or intervention. Yeah, yeah, yeah, I hear this all the time (I hear you saying). Listen up, we are not speculating here, this is a well tested working model were are talking about, here are the critical paths to a successful second home opportunity:
Location, location, location – when considering where to buy, there are some show-stoppers to apply to trigger the Yes or No button:
Is this a high demand location?
Is the land/property accessible?
Is the building and building services affordable?
Will the build quality be high?
What are the land topography considerations? (An understanding of the fauna and flora)?
Legal & Tax Frameworks
Is there a route to purchase by a foreign investor?
Is there a robust legal system to uphold contracts and agreements?
Are there favourable tax routes for this investment?
What are the historical forex trends?
Service & Maintenance
Are there any maintenance and service contracts for the management of the property and land?
Is there a range of affordable labour options?
Is the property maintenance and service costs affordable?
Can the property pay for itself?
Is there any commercial opportunities?
What are the selling trends of properties?
What are the development opportunities?
Is this an affordable opportunity for me?
Do I have any surplus cash that I do not need to depend on?
Can the investment be shared i.e. syndicate, consortium, partnerships?
Is there any security available?
What is the period(s) of investment?
Is this a cash or mortgage/bond investment?
Is this a trust fund or legacy opportunity?
As said in the introduction, if you take off any ‘rose tinted spectacles’ and apply a practical business approach to securing a second home abroad portfolio, the outline provided will create a clear road for you to make a worthy investment journey. In our experience, second home opportunities hold high value in providing investment, lifestyle, and life-changing considerations. Lifestyle trends within modern society dictate a living-to-work philosophy. We believe embarking on second home abroad portfolio affords you the opportunity to enjoy the fruits of your labour whilst you are still fit and healthy to do so.
Maxine Smith – Executive Director – Nyumbani Estate