Inspection Tours: taking the perceived risk out of overseas property investment

Inspection Tours: taking the perceived risk out of overseas property investment

Investing in a buy-to-let property can be a difficult decision. Buyers are faced with considerations around the type, location and cost of their potential purchases as well as the level of returns their investment could bring.

What’s advisable during this process is that buyers find out as much information as possible to ensure their decision is an informed one. Those investing on home soil would physically view the properties they might buy, and it should be the same for anyone looking abroad.

The issue for many investors is that buying a property that is some thousand miles away makes overseas property investment feel riskier than it is – there is a comfort in buying something local to home. However, while there are potential pitfalls such as lack of local knowledge and reduced accessibility, they needn’t feel restricted from maximising an overseas property investment if it can genuinely offer equal or better rewards.

This is where inspection tours come in. Run by developers such as The Resort Group, they enable investors to truly experience their preferred destination and explore the quality of the properties on the market (or similar properties if they are considering off-plan). Tours also give buyers the chance to ask the sellers as many questions as they like. Preparation is therefore key, and we have listed our recommendations for anyone looking to book a tour.

Firstly, it’s important to stress that gone are the days when people would sign up to an inspection tour with little or no interest in buying a property. It’s not a free holiday, and any serious overseas property buyer should not treat it this way.

Before the tour

Knowledge is king and you should conduct online research on areas that will influence long-term investment potential – infrastructure, economy and safety to name a few – and prepare a list of questions to ask. You should also meet with the developer in advance to discuss what you want to get from the tour (and indeed your purchase) and, likewise, understand what is expected of you. You should also receive a full itinerary and find out who will be showing you around the location and property. Ideally, you will be meeting expert local guides and, if buying off-plan, senior construction experts.

It’s also important you are given some free time to explore. Take along a friend or relative to give you a second opinion. After all, buying a property is a major decision and it’s always good to sound ideas off someone you trust.

During the tour

When you have arrived, you need to keep in mind that the inspection tour is for research purposes. One of the most important tasks is to conduct due diligence, requesting copies of documentation that clearly shows development plans as well as the financial strength and stability of the developer.  

There are many other elements of an overseas investment property that you need to investigate, and they include local amenities, transport links, weather and safety right through to annual costs, letting potential and resale options. The experts taking you on the tour will be able to inform you on many of them, but you should also speak to the locals for an honest opinion on the quality of properties and things to do. In addition, you should observe those that are on holiday. Asking how their experience has been will give you a good indication of how strong the tourism market actually is.

As well as noting the factual information on the tour, it is also important to write down how you feel. What excites and concerns you? How confident are you that your chosen property will deliver the investment potential you desire? Finally, take photos throughout the tour. Capture everything from the furnishings in the property to the nearest amenities. All of this will help you make your own conclusions rather than relying on marketing literature.

After the tour

There will no doubt be a lot to think about when you return home, so it’s crucial you take time to reflect. Buying a property can be tempting (especially if it’s in a beautiful and sunny location), but make sure your head rules your heart. After all, it’s a serious investment and should not be taken lightly.

Read up on your notes, view your pictures and review all of the collateral given to you. Discuss your findings with your friends and family too. If there are any unanswered questions, call or meet with the developer. You should also ascertain what’s next. What are the next steps in buying your chosen property and what is required of you?

Once all of your questions have been answered, and you are satisfied with your research and experience, you will be in a far better position to make an informed decision.

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Latest Comments

Oliver Conway
Oliver Conway 18 May 2017

Making a neat inventory is a good idea, but if the seller is not willing to provide it, can the buyer demand it?

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Bertrand 17 May 2017

First step to nationalisation of the private rented sector IMHO. Nanny state poking their noses into things yet again. I object, as a decent landlord, sometimes having to deal with some pretty awful tenants,...

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Izzy 16 May 2017

This is such a great a post. I love the detail you've gone into. It's a very useful article for helping those who are looking at deciding which sector they would like to go into! When I first started investing...

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paul burnham
paul burnham 30 Apr 2017

Jeremy Corbyn's pledge that a Labour government would build 500,000 new council houses must electrify the general election campaign. Reliance on markets and the profit motive has brought huge housing-related...

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CommercialTrust 28 Apr 2017

Sadiq Khan?s announcement of an online database of landlords and letting agents who have been convicted of housing offences, appears on face value to be a variation of the already implemented Database

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warren 26 Apr 2017

You're very welcome Mary! Glad you enjoyed them :)

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Mary Ward
Mary Ward 26 Apr 2017

Thank you for the wonderful ideas. First impressions can make or break a deal. It's sadly that many homeowners drop the kerb to create an off-street parking space.

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Tony Gimple
Tony Gimple 14 Apr 2017

I'm not at all surprised that so many landlords are still confused about what the tax changes really mean and how it will affect them. In particular, the blind rush to incorporation is leaving landlords...

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MH 13 Apr 2017

You are right that the bank holidays are going to be spoiled in looking for the properties. But people who want to sell their property and looking for the better relocation, they can get benefits of this...

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bnellyb 08 Apr 2017

There will be an exodus of private landlords over the next 5 years as tax changes take effect, private landlords provide an important service to the rental market, why do housing associations and councils...

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Fred Cassman
Fred Cassman 07 Apr 2017

"Make it look like you are at home": often people forget this and share on facebook their location!

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jared townsend
jared townsend 05 Apr 2017

It'll be interesting to see how & if the Government's asset sale regarding mortgages helps

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