When it comes to moving abroad, there are a lot of things that you need to think about in order to make sure the transition is as smooth as possible. One thing that can trip up a lot of wannabe expats is the question of whether to buy or rent once they get there. It is a hard question to answer because it depends entirely on you, your preferences, and your budget. However, before you make your decision, you need to better understand the differences and how they apply when moving abroad, so let’s get into it.
Buying Property Abroad
Purchasing property has its own benefits, it is a sound investment, and it is more secure than renting. That being said, obviously, it is a big expense, and if you aren’t sure how long you are going to live in that country for, it can hold you back should you want to move. So first things first, as with purchasing any property, you need to have a budget in mind.
The housing market can differ depending on the country, so it is imperative that you do your research. Look into the market and research the fees that you can expect to pay so that you can factor those into your budget too. You should also use a local company to explore your real estate options. For example, Property Guru has homes to buy or rent across several countries, including Malaysia, Singapore, Thailand and Australia.
After you have worked out your budget, researched the market and viewed your options, it is time to think about the mortgage application process. The truth is that purchasing a house abroad as opposed to renting does tend to be more complicated. This is because you have to jump through a number of hoops to ensure that everything is all above board and you have met that country’s legal requirements.
You will also need to factor in the effect that the currency exchange rates could have. This will depend on the mortgage lender that you choose. For example, British banks often have higher exchange rates which can make the process more expensive. That being said, using a local lender or finding a specialist broker can help to ensure that you have access to an affordable rate. You do not have to wait until you are in the country you want to move to; you can apply to a lender overseas from your home country.
Some people prefer to wait because they want to view the house that they plan to buy in person, so they take a trip to said country to view the properties and get a meeting with a mortgage broker or lender while they are there. You will also need to think about the deposit you will need to put down. Some countries have higher deposit requirements for non-residents, which could have a significant impact on your budget.
Lastly, you need to make sure that you have a good understanding of the property rules and regulations for your destination. A lot of countries place restrictions on expats buying property or land. While some countries don’t place any citizenship requirements for foreign nationals looking to buy property, they might impose stricter tax obligations on you. It is worth doing your research or consulting an expert to ensure that you understand the legal requirements and ramifications of your decision to purchase property abroad.
Renting Property Abroad
Your other option when moving abroad is obviously renting; the biggest thing to think about when renting is the cost. However, there are also a lot of benefits to renting, like the flexibility and often the wider range of properties available. Although, when you rent, you are effectively paying someone else’s mortgage when you could be paying your own and often, it can hinder your ability to save your money for your own mortgage one day.
When renting, you should always go over your lease carefully to understand what is included. In some instances, the bills might be included in the rental price. There are also properties which come fully furnished, which would mean that you don’t have to purchase your own furniture. Although if you want to make the property homier and more personalised, you can opt for unfurnished properties. The security deposit is another thing to consider. Finally, remember to look into the administrative fees and rental requirements, which can fluctuate not only between countries but cities too.
In Conclusion
The choice between buying and renting is a personal one. Think about how long you are going to be there for; if you don’t plan to live there for that long, then renting might be a better option. However, if you want to put down roots and you see yourself there long-term, then why not buy? Each option has its own selling points and drawbacks at the end of the day. Either way doing your research is imperative.
