25 Things You Must Know Before Buying Property Overseas

Date: 01/13/2006

International Living Postcards--Saturday Edition

Saturday, Jan. 14, 2006
Paris, France

Dear International Living Reader,

He's a nice guy; friendly. He seems to know what he's talking about, and, boy, he sure paints a pretty picture. "The clubhouse will go here…the tennis courts over there…and around the bend down there will be the marina…"

The sun is bright, the sand is soft and white, the water warm. Palm trees sway in the slight ocean breeze. Sitting beneath them, frozen rum drink in hand, you're hooked. If this ain't Paradise…what is?

And this guy over here…the one pointing out all the amenities to come…he seems like a good guy. You have no reason to doubt anything he's telling you…promising you…

Or do you?

He says he and a partner are developing the land…but do they really own it…or does someone else have claim? You had to cross another property to get to this spot on the beach, but your new developer friend assures you he's arranged for a right-of-way, so access won't ever be an issue. He's also taken care of all the necessary permits…his crews are standing by ready to start work paving the roads and running the electrical lines…and the construction of the clubhouse will follow shortly thereafter. He's not waiting on sales to fund the infrastructure work…he's got capital in the bank.

That rum drink is doing its thing…you can't imagine anyplace on earth you'd rather be.

I'd better sign a reservation contract, you think…before the best lots are snatched up. I sure don't want to miss out on this…

Hold it, there, partner. Let me balance the dream with a little reality.

Before you sign anything, you need to confirm a few fundamentals. Does this guy own the property he's trying to sell you? And does he own it through fee-simple title (as opposed to rights of possession, for example)?

Are there any restrictions or special requirements for foreign ownership of land in the country where the palm trees you're currently sitting beneath happen to grow?

Has your new friend ever developed land before?

Does he have the resources (financial and otherwise) to do what he's telling you he's going to do?

Is he waving any red flags?

Once you've satisfied yourself on these fundamentals (through independent legal opinion), things get more complicated. How should you hold the property if you buy it--in your name…jointly with your spouse…in a trust? What tax liabilities will you be taking on, in the country where you're buying and also in the U.S.? What's your exit strategy? And what will you do if your new friend never delivers on a single one of his pre-sale promises? If he never builds a clubhouse or a marina…never runs electricity or paves a single roadway? Will you still have made a good buy?

Before you think about investing…before you sign a single document…do yourself a favor: Read the new report my research staff has put together. It's our New Years' gift, available free to you as a reader of these Postcards. And it covers everything we think you need to know before you set off for some exotic land to meet with some nice guy developer and listen to his tales of what will be…

Reading this little report could mean the difference between the investment in Paradise you've been dreaming of for so long…and an expensive, demoralizing folly.

We call it 25 Things You Must Know Before Buying Property Overseas.

Twenty-five pieces of wisdom hard won through our own mistakes and missteps. Read them here:

http://www.internationalliving.com/free_reports/pdfs/25-Things-before-moving-overseas.pdf

May they save you time, hassle, frustration, and money.

Lief Simon
Real Estate Editor, International Living

Please note: In order to view 25 Things You Must Know Before Buying Property Overseas, you may need to download Adobe Acrobat Reader: http://www.adobe.com/products/acrobat/readstep2.html

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