Time to Invest Abroad?

The gloom of political turmoil, the recession, rising petrol prices and perhaps the weather makes the prospect of soaking up the sun in your own place away from it all the more attractive.

And in fact, now is a good time to invest – according to recent reports, prices of properties in Spain, Portugal and France have fallen by anything up to 40%.

Cheaper mortgages and a rate cut by the European Central Bank has led to an estimated 20% increase in the number of people enquiring about buying property overseas.

Perfect holiday pad?

Janet Pell of AA Insurance, whose portfolio includes AA Holiday Home Insurance, says: "If you thought the recession had killed off any thoughts of overseas property investment you'd be wrong.

"There are some great bargains to be had that not only promise lazy days at your sun-drenched home from home, but could offer good long-term investment potential too.

"And, of course, you can earn some money by letting your property when you aren't there yourself."

But Pell advises doing your homework first. "It's not just location – and that can be important, as some parts of Europe such as Italy and Greece are prone to earthquakes so bargains in such places may – literally – be not all they are cracked up to be!

"You will need to use a reputable estate agent, ideally picking one that is a member of a reputable body such as the Association of International Property Professionals or the Federation of Overseas Property Developers & Consultants.

"You will also need a lawyer. Don't take the word of your estate agent for it, no matter how nice and helpful they seem, that they will sort out all the problems for you. It's vital you choose a lawyer independent of the vendor or estate agent. That way you can make sure they are acting in your best interests.

"It would also be advisable to talk to an independent financial adviser who can advise on long-term affordability, interest rates and foreign exchange rates to make sure you don't get caught out in future," says Pell.

Place in the sun

Once you are the proud owner of your very on place in the sun, you'll need to think about insuring it. Fortunately, AA Insurance offers holiday home insurance that is straightforward, flexible and offers cover in the main property hotspots.

"You'll need to be confident that your cover includes both buildings and contents. You'll also need decent coverage for accidental damage, cover while the property is let, cover for any outbuildings and their contents, protection of your legal liability as home owner and, of course, a 24-hour helpline should you need it and your legal liability as home owner."

Find out more about AA Holiday Home insurance.

 

Last updated: 18 June 2009