Expat Rental Guide: Introduction

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Should expats buy or rent their property abroad?

Unfortunately the current economic climate has left property markets depressed worldwide, and particularly affected are the thousands of expats trapped abroad.

Since the financial crisis struck back in 2008 literally thousands of people have found themselves powerless to escape their souring lives in the sun after being left unable to sell their foreign properties and return home.

Commonly these expats retired in the UK before selling up and using their capital to head abroad, buy the ideal property and maybe even live a coveted ‘mortgage free’ lifestyle. But with property prices plummeting those dream homes are becoming money pits.

Many can’t sell their properties at all and those who can face making a hefty loss. Others can’t meet mortgage payments but a lack of means puts moving back to the UK out of reach.

It is easy to feel sorry for these expats, but should we?

For generations sons have been lectured by fathers to get on the property ladder as soon as possible. To upsize property (and mortgage) as careers develop until you achieve the holy grail of owning your own property, generally after 25 years.

Conventional wisdom has always been that if you hold onto a property long enough (i.e. 25 years) it will ride the natural market peaks and troughs and you can, potentially, turn in a tidy profit. Once the mortgage has been paid off its time to downsize, put a healthy sum away for those rainy days and enjoy that hard earned pension.

This general premise has worked for years.

So why did those same fathers who have been handing out such wise advice not listen to themselves?

Being an expat is by nature a short term status for some: many are ‘posted abroad’ because of their career and expect to move on regularly, others move to find work and logic dictates they should remain flexible enough to move where the work is, especially in a country they don’t know. Then there are the thousands who retire.

Spain, Portugal, Turkey, Greece etc are full of expats that having climbed the slippery rungs of the property ladder promptly sold up and sunk all they had to invest into a ‘dream property abroad’. No mortgage granted, but realistically not enough years left on the clock to ride out the natural market peaks and troughs.

For a retired expat to purchase a property makes little sense. To tie up hard earned capital in a property may provide a sense of security, but so does a prison cell, and I suspect that many an expat feels that they have been handed down a life sentence right now.

For years my advice to anyone looking at the expat life has been to rent for a period of time in the country you plan to move to. Give yourself time to get to know whether the country region, lifestyle, finances etc work for you.

These days my advice is even simpler: rent.

For many, selling a regretted overseas property purchase might be out of the question, but renting is a viable way of deriving an income from your home until house prices increase again.

In Part One of our rental guide we will be introducing you to the process of renting out an overseas property and helping you prepare for it.

Please bear in mind that although this guide will give you some ideas on what to do and who to talk to when it comes to renting your property you should seek expert advice before making any decisions or signing any paperwork.

Chris Marshall
This post was written by
Chris has lived and worked in the UK, USA and Spain before settling down in Almerimar, Spain in 2003, where he spends his time time running Almerimar Life, writing on a freelance basis for a number of papers and clients blogs, broadcasting regularly on a number of radio stations and along Sands running ALStrays - a cat re-homing and transport project he set up with his wife, which also transports dogs to the UK and throughout Europe