InternationalLiving.com

The pains of administration

By Lief Simon

Profits from real estate investing are exciting. Not so exhilarating is dealing with the administration and bills.

In the less sophisticated markets, like those in Central America, the government isn't likely to send you a property tax bill. You have to go down and ask for the assessment and pay it in person. In some countries, you may or may not get a utility bill in the post, but again, in Central America you are likely to have to go in person to pay the bill even if one is mailed to you. This is where you'll find that a good property manager, who will pay your bills for you, comes in handy.

In more sophisticated markets, like Western Europe, you can set up your utility payments on direct debit from your bank account, but annual tax bills will still need to be paid by check.

Whether you are paying in cash or by check, in most cases, you'll want to open a bank account in the country to pay your bills-electric, gas, cable, Internet, telephone, and property taxes. If you are renting out the property, you will definitely want a bank account where your rental manager can deposit rent.

Managing a bank account can be as much of a hassle as paying the bills. That is why I didn't bother with opening an account in Canada for a single piece of land. I figured that Canada was a sophisticated market and that I would be able to pay property taxes by credit card. Unfortunately, the local municipality doesn't accept credit cards.

The property tax bill came this year and I went to my bank in France to do what I had always done when I lived in Ireland-get a cashier's check in Canadian dollars. My bank in France couldn't do it-not without at least one-week's notice. I tried some other banks and they wouldn't even talk to me unless I had an account there.

I finally found help from the French Post Office. Yes, the post office. In many countries, the post office offers financial services much like banks, as well as Western Union-type services. They were able to send a money order in Canadian dollars that would arrive in less than a week.

With that payment resolved, I am considering changing banks in France, but I still won't be opening an account in Canada.

Land is a special case. Except for the property taxes, you can ignore the property without much risk.

For an apartment or house that is part of a Homeowners Association, in addition to the association fees that need to be paid, you have to pay attention to association issues. These can range from voting for renovation work on the outside of an apartment building, to discussions about how much security is needed for a gated community. And then there are the annual and ad-hoc meetings.

You can usually send your property manager to these meeting if you aren't in the country. Or you can send a signed proxy to the president of the association for your vote. Unless you speak the local language (or your association is mostly gringo's), you'll either want an interpreter or you'll want to just skip the meetings.

I made the mistake of going to an ad-hoc meeting for our Paris apartment this year. The issue at hand was whether the association should pay for part of the renovation of one owner's apartment. The fact that the lady even called for the meeting was ridiculous, so I felt compelled to attend to make sure my vote against the question was duly recorded.

Attending was a mistake for several reasons. First, I don't speak French (though I'm learning). Luckily, several people in the building do speak English so I was able to get a briefing of the main points in side discussions during the meeting. Second, it took more than two hours to reach the conclusion that the matter needed further study by experts.

It seems that although everyone else thought that the request was out of line, no one wanted to be the one to actually vote against it so no vote was called. Instead, it was being left to the experts to decide and the issue would be addressed again in a month at the regular annual meeting.

Sometimes it is better to let things sort themselves out on their own