There are several fundamental steps to follow before purchasing a luxury property. In many ways the same basic steps are applicable to all property transactions regardless of the level of investment but purchasing a luxury property overseas requires extra due diligence.
The first step is research so do your homework before buying a property, particularly if you are investing in unfamiliar markets. There are many factors to weigh-up and assess and getting the right location is paramount. Political and economic stability, restrictions on non-resident ownership, local market trends, transport links, language barriers, year-round accessibility, re-sale potential and purchase costs and ongoing property taxes are all important considerations.
Does the location offer the high quality amenities and infrastructure required to facilitate a truly luxury lifestyle? Each buyer will have their own criteria but climate, gastronomy, marinas (with requisite capacity for large private yachts), sports facilities, designer shopping, security, a good road network and easy access to an international airport are aspects that many luxury property buyers will value when choosing where to invest.
Once you have settled on a country and the right area for your investment you will need to find a reputable, professional estate agency to assist with your property search. Your chosen agent should have an in-depth knowledge of local market trends, the buying process and associated costs and fees and a strong track record in luxury sales in the area. Lucas Fox, for example, has its own specialist division dedicated to the sale of high end homes – Lucas Fox Prime (lfprime.com) with an elite team of sales consultants offering a highly personalized service. The agent should also be able to introduce you to a network of trusted professionals, including lawyers, tax accountants, architects, constructors, banks and mortgage brokers. Having a good working relationship with your agent is important and will give you peace of mind in what can sometimes be a long and stressful process. A good agent will prepare you for the pitfalls and ensure that, wherever possible, these are avoided or efficiently navigated.
Purchasing property at the top end of the market comes with its challenges, not least buying at the right price. This is where you will have to trust your agent’s judgement and listen to their advice. When assessing the price of singular luxury properties in prime locations there are sometimes few, if any, direct comparables, so your agent’s opinion and specific market knowledge is a valuable resource. Depending upon the location of the property, the nationality of the seller, and cultural sensitivities, your agent can also advise on best practice for negotiating price.
Ensure that you instruct a lawyer to advise on the legal process, draw up contracts and carry out all the necessary legal checks on the property. Paying for a professional survey by a qualified surveyor is also of fundamental importance. The survey should include a review of the structural integrity of the building and the good working order of the installations. Equally, if you are looking to makes changes to the property ensure that your surveyor makes the necessary investigations with local authorities prior to purchase to ensure that planning regulations will permit the anticipated works.
There are also important considerations post purchase. The ongoing taxes associated with non-resident property ownership can vary greatly from country to country so you should be clear on the fiscal implications. Annual running costs such as utilities, pools and garden maintenance should also be taken into account to avoid any unexpected surprises. Finally, make sure that your agent can either offer or recommend a professional property management service to ensure your property is secured and maintained to the highest standards.
Lucas Fox Partner Tom Maidment