Over one million Britons will buy a home overseas in 2007. In Cyprus eighty percent of new homes built will be sold to UK residents. The overseas property market is booming because of perceived value, improved travel, and the increased ability to work from home. Moving abroad can be a dream come true - but there are serious pitfalls to avoid.

Finance
Many buyers choose to re-mortgage their UK home finance the overseas purchase. It makes sense from a language point of view; all the documentation will be in English and the financial safeguards that apply in UK law can be an advantage. Generally allows you to borrow up to 90 per cent of your existing main home's value, (as long as the total does not exceed 3.5 times an individual’s income or 2.5 times a couple's joint income.)

Don’t take the risk of using cash – that means you won’t have anyone (banks or building societies) making checks on your behalf, and it means you may have little chance of getting your money back if anything goes wrong.

If you do make money renting out the property you will have to pay tax on it. If that money is transferred back to the UK you will pay UK tax, otherwise you pay the tax rates of the country in which the property lies. Get independent tax advice. It can be more expensive to buy a new home in France than an old property because of local tax laws. There is no VAT on old homes – but there will still be taxes.

Avoid making an impulse buy while you are on holiday.

Make sure you have thoroughly investigated the surrounding area - and preferably go at different times of the year. Driving rain and cold winds can make a big difference to first impressions of sun and sand.

Use official channels to move all payments - without proper records you will not be able to claim insurance or refunds if you do not have reliable records and you may have difficulty moving your money back to Britain.

Don’t pay up front for a home that is not built yet. Any reputable developer will accept that payments should be made in stages as the building goes up. And make sure that you have agreed the final price and that the cost doesn’t go up during the building process.

Deal only with reputable agents and developers.

Set yourself a realistic budget based on the research you do into the types of property you’re interested in, the area you’re interested in and ultimately the country you’re interested in.

Don’t buy unless you have the finance already in place. If you don’t have the money to hand you could easily lose your entire deposit.

You will no doubt be seduced by the surroundings of your chosen destination into dreaming of the idyllic holiday-like lifestyle you can enjoy all year round when you secure your dream home in the sun, but you have to ensure you tread carefully because there are traps and pitfalls at every stage of the property buying game and these facts do not change just because you change country.

Don’t be tempted to cut corners, take risks or assume that everything will be fine.

Don’t sign ANYTHING unless you understand it fully

Buying and ongoing costs - the price of a property is not the only money you will have to pay out when buying a home abroad. You will have fees, taxes and additional expenses when buying - and then ongoing there will be things like property taxes and rates to pay as well as anything from management fees for the upkeep of communal areas, insurance, service charges etc., etc…don’t forget about all of these expenses and try and get a feel for what they will be before you buy so you can ensure you are not overstretching yourself financially.

Ongoing accessibility - while you may easily and cheaply have access to a given location today thanks to a single budget airline reaching a remote airstrip near your home, what if that company closes the route …have a back up plan and ensure a property is always going to have decent accessibility otherwise you’ll never visit it and it will become a millstone around your neck that you cannot enjoy or even resell.

Every property needs insurance for its intended use. If you let your property, make sure it is adequately covered for any damage caused by tenants. Holiday homes left vacant for long periods of time will often also need a special type of cover.

Make a local will
Each country has its own inheritance laws and what applies back home can often be quite different abroad. Making a will cuts out time consuming and expensive legal problems for your heirs and should mean they pay less inheritance tax than if it is dealt with through the UK system.

Save money in currency exchange
Be aware that with a purchase as large as a property, you could save thousands simply by using a professional currency exchange broker to make your money transfer on the day of completion. With exchange rate fluctuations often as high as 10%, by booking a favourable exchange rate in advance, you could save yourself as much as 2,000 euros on a 200,000 euro purchase!

A second home is not always an investment
A second home ought to be just that: a home. Which means you shouldn’t kid yourself that you are bearing all these huge expenses because the home is a wonderful investment. It may turn out not to be. Looking at it from the other point of view, if you really want an investment, maybe you should go for something blander, easier to maintain, in a more touristy location, with cheap furniture and less personality than you would want to live in yourself.

Which brings us to our final tip: always buy somewhere with an easy exit strategy, where you can sell simply and easily, without too many taxes and other unknowns.
At the end of the day, buying somewhere is only half the story. The other half is selling the same place when you no longer want to live there.

With the right help and guidance overseas property investment can provide outstanding capital appreciation. This has been proven time and time again. Choose an experienced firm whom has experience in all the pitfalls associated with property purchase so they can carefully guide you to ensure your investment is a true success.

Homes Dubai has an international network of credible developers whom have been carefully vetted. HI work with property investors to maximize their investment returns. The approach is to start small and produce results and slowly introduce further new and exciting opportunities to build a diversified and healthy portfolio. Client returns are of paramount importance as there is a heavy reliance on long term business.