Don’t Get Stung On Foreign Property Deposits

 

As lockdowns and disruptions from the Covid-19 pandemic continue, there’s no doubt it has changed the way we live and work. One impact is that jobs which were previously thought to be only office-based are now effectively done remotely, and whether you call it flex or hybrid working, working from home looks here to stay.

 

 

 

Written exclusively for Expat Network by Victoria Yasineskaya, Chief Marketing Officer at PagoFX

 

This presents workers – at least those with the ability to work from anywhere – with the opportunity to completely change where they work without having to leave their job security behind. It’s been well reported that those in the UK are leaving cities and moving to the countryside for more space and a better quality of life. For those more adventurous or with ties to other countries, there is also the option to work either temporarily or permanently from outside the UK.

No wonder, then, that there is an increasing interest in buying property abroad. Even when travel restrictions are in place, there is a strong draw to working in the sun in the south of France and abandoning your small studio flat in central London. For many workers, so long as they have an internet connection and a similar time zone, any destination is on the table.

First-time buyers of property abroad however need to make sure they do their research. In the middle of a pandemic, the last thing people need is to lose money on hidden fees or unexpected costs. There are plenty of places where costs can increase when buying property abroad. This is why it’s important first-time foreign property buyers do their research and speak to those they trust.

Working with local agents and suppliers (if building work is required) means many will need to transfer money between these countries in local currency. In this case, there needs to be an awareness around the tools that can be used to transfer money between currencies. Too many people assume that transferring money between accounts internationally is the same as doing so domestically. It is not the same, although with the right tools like PagoFX, it can be just as convenient to send money abroad in their local currency.

One big cost that buyers often overlook is the deposit for the property. This is normally a large lump sum, and transferring it can cause plenty of anxiety, especially when you’re sending it abroad. Comparing both provider’s fees and exchange rates can help consider the full cost and beware of situations where a stated exchange rate differs from the mid-market rate, which you can easily find on Google or news sources like Bloomberg and Reuters. Meanwhile, when buying property, speed can also be critical and ensuring the money arrives on time could mean the difference between a property acquired and a property deal lost. In this instance, specialist FX providers can often work fastest.

Fortunately, there are solutions available. Foreign exchange transfer services like PagoFX are optimised to send money abroad, so deposits, or smaller payments related to buying that dream house abroad can be sent from the comfort of your laptop or mobile phone for a relatively low fee and at real-time, mid-market exchange rates.

Importantly, never underestimate the benefits of working with trusted local representatives. While paying them in their local currency adds a level of complication, the advice you get will ensure you don’t end up with a property that’s falling apart or with major liabilities.

Working from abroad will become increasingly common, and many offices will not be back to full capacity for some time. While the idea of a desk by the beach in the sunshine sounds idyllic, it doesn’t come without challenges to overcome. Seek the right advice and use the right tools though, and getting that property abroad could be closer than you might think.