As global interest rates continue to stagnate, property is a sound way to build a secure, profitable investment portfolio that will lay the foundations for your future. However, many expats and foreign nationals are deterred from property investment, due to risk adversity, misconceptions surrounding finance and the complexities of investing abroad.
Over the past 10 years, Liquid Expat has secured mortgages for thousands of global investors, and seen first hand how sensible investment choices and finance deals can pay dividends. To help you navigate global markets and build a robust property portfolio, we have a few expert tips that we have gleaned from successful expat investors.
Explore pastures new
As an expat, it’s tempting to buy property in your home country, due to familiarity with the market and the option of using the property as a second home. However, serious investors look further afield and base their decisions on purchase prices, lending options and rental demand. They are also prepared to take the leap in developing countries and cities where the capital appreciation prospects are highest.
Developing markets offer much higher capital appreciation prospects; back in 2009, canny investors began purchasing property in London, and have seen their properties increase in value by over 100%. Today, regions such as the Far East offer similar opportunities for investors willing to raise finance.
Exchange rates and rental income can offer crucial leverage when investing in overseas property markets. For example, at present the Australian dollar is relatively weak against core currencies, which means you would require a much lower deposit than for properties in mature markets such as the UK. With an expat buy to let mortgage, the return on investment could be even higher; the average rental income of a property can be anywhere between 3-8%.
Consider expat mortgage options
When buying property in your home country, it’s natural to apply for finance after you’ve found the right property. However, for expats and foreign nationals, securing a mortgage isn’t so simple, as there is no clear sourcing system for non-resident applicants in countries such as the UK, Australia, Germany and USA. Therefore, exploring lending options before you begin searching is key to securing your investment.
By knowing in advance how much LTV and cash deposit you require, what your lending limit will be, and what restrictions lenders may apply for the type and usage of property you seek, you can avoid non-acceptable property from the outset. This process is fundamental to starting and building a property investment portfolio; we specialise in this market, and help expats secure competitive rates and high LTVs that will leverage their capital.
Spread your risk
Whilst property investment may be a relatively low-risk option, successful investment strategies spread risk and develop economies of scale. To this end, it’s crucial to continually re-evaluate and diversify your portfolio, to safeguard against the peaks and troughs of individual property markets.
By renegotiating your terms on current properties, an expat remortgage could free up capital to expand your portfolio, which could prove lucrative when purchasing buy to let properties. So rather than buying one property in London, you could spread these funds across properties in the capital and the North of England, and leverage the purchase price by obtaining LTV mortgages of up to 75%. With capital appreciation and rental income, we’ve seen clients double their initial outlay in as little as a year.
Developing a property portfolio can be lucrative for expats looking to secure their financial prosperity, especially those saving for retirement. Whether you’re looking to invest in a second home or you’re thinking of developing your portfolio further, seeking finance deals is a smart way to generate capital and secure profitable investments, chosen by investors in the UK and globally.
Contact Liquid Expat Mortgages to get a smart, comprehensive list of lenders, each of which are specialised to help you with your foreign investment aims. We can provide free pre-approvals to assist you when you’re exploring your finance options, and regularly source a wide range of mortgage deals.