It’s a sorry say of affairs we seem to have ourselves in at the moment, with the gloomy news all around us that we’re facing a financial crisis worldwide, with currencies flopping about like stranded fish, and exchange rates either going through the roof or sinking below the basement, depending on which way round you’re looking at it. Those businesses and investors who work on an international or global scale are struggling to identify the best way to work, and simply keeping abreast of the current exchange rates is nearly a full time occupation.
It used to be the case that we would simply pop to our local shop or town and purchase the items we needed in our local currency. We’d think nothing of it, of course. However, with so many of us now buying products online, we no longer even think about the country that the company is trading in. Often we see that the prices are listed in dollars, or Euros, and think very little of it. Some people change the currency to their own local one, but in fact if you do a quick, independent currency exchange rate check, you’ll often find that buying products in one currency will be cheaper than buying it in another, possibly your own. Since some companies on the web have their converted prices fixed for a few days at a time, a significant change in rate can make a big difference.
Investing in property abroad can seem like a dream, but when you throw the challenge of dealing with different currencies and the exchange rates that fluctuate so swiftly, it becomes a massive problem financially, since the difference of a few pence in an exchange rate between, say the pound sterling and the Euro, can sway the price of the property by thousands of pounds. There are enough challenges and hurdles to deal with when buying overseas, and worrying about exchange rates is one aspect that you could well do without.
The reason I’m writing this is to point out that the sky might look bleak and grey as far as overseas investment is concerned, but there are silver linings around, and I think I’ve just found one which looks more like gold! I came across an overseas property investment company that appears to have got stuck back at the beginning of this year when rates were good, but either hasn’t noticed that rates have slumped since then, or simply don’t care Either way – it’s rich pickings for you if you’re into investment overseas. The current rate is 1.26 to the pound, yet the company I’ve seen is offering 1.40 to the pound – an 11% difference! To encounter this kind of rate in today’s financial market is well worth a second look in my view.
To put this kind of benefit into perspective, let’s state you were looking to buy a very reasonable 150,000 property over in Spain, but were looking at an exchange rate of 1.26 to the pound – which is normal. By taking advantage of the 11% difference in rates that this company is offering, you could make a saving of over 16,500! I defy anyone who’s considering overseas property investment to turn their nose up at such a chance!
Normally when you’re looking to invest in property overseas you will want to make sure that you research the exchange rate first of all, and once it has been identified, it is agreed by all parties and written into the contract. By doing this you safeguard yourself against any unforeseen global crisis in monetary exchange. Finding yourself a company willing to backdate the exchange rate to the early part of this year, before the crunch caused such a downturn in rates across the world is of enormous benefit, naturally, and is well worth further investigation. It’s finding companies like this that are either absurdly generous, or simply unwilling to accept the pessimism of the banks that makes the whole prospect of moving into the sun a whole lot sunnier!
Of course, there’s another, almost hidden advantage here. When buying property there is always the danger that prices dip for a while, and you’re left with a property dropping in value. Clearly if you do your homework and buy a property that’s well worth investing in, this won’t be a problem, but we all have to be realistic, and if exchange rates are low, it may well affect consumer interest in property markets. Purchase managing to jump in to the overseas property market at the exact time that rates are low, but managing to secure a high rate for yourself, not only are you saving money in the short term, but you’re guarding yourself against possible variations in property prices for the longer term too. To be honest, there’s tiny to halt you buying a property at this high rate, and selling it on at the normal rate of exchange a little later and netting yourself tens of thousands in profit!
Investing in property overseas is never entirely plain sailing for the first time buyer, since very often the ways and rules of buying property, particularly for foreigners, can vary quite a bit from those you may be familiar with back home. There can sometimes be extra costs involved such as lawyers’ fees and applications. A good company or agent should help you through all these stipulations easily, but if you start off with a budget in mind, these fees can tip you a little further than you’d have hoped. Taking advantage of a really low rate such as this once I’ve encounter helps you stretch your budget much further, and can help to make the whole process very much easier.