Property Forum
How to Buy Property in Albania
Consider why it is worthwhile buying property in Albania. Albania is not yet the finished article for overseas property investment by any means, but it is often in this kind of country that the best offers are to be found. In fact, studies have shown that prices in Albania are among the cheapest in Europe – which also means yield has remained stubbornly low. However, as the global economic slowdown hit, the property market in Albania had not developed to such a point where property was overvalued, or excessive development had caused a glut of supply. Therefore, there are those who feel that Albania could be extremely well-placed when the overseas property markets begin to pick up again
Look for the popular buying locations in Albania. As Albania is clearly still an emerging market for the overseas property industry, for the vast majority of people who buy there in the next couple of years there will be at least some element of investment to their purchase. As property buyers will be looking for the tourist market to make up most of the rentals, and then towards the local market as the economy continues to develop, rentability will be a key factor in deciding both what type of property and where they purchase.
The tourism market in Saranda is booming due to a high number of honeymooners visiting the town, and attracted by the proximity to Corfu. Property prices are around €650 per square metre, though capital growth is unlikely to continue at the rate of 20 per cent per annum seen in the past couple of years.
Know the legal issues. There are currently no restrictions on UK citizens owning and buying property in Albania, but there are certain issues to make sure you are aware of, and that you have all contracts and official documents checked but an independent lawyer to ensure you know what you are signing. You will also need to have a notary public engaged in order to register the purchase and act for both sides during the property purchasing process. In particular, it is important to make sure the title deeds of the property are thoroughly checked to make sure you are buying from the true owners and they have the right to sell to you. Since the end of Communism in the early 1990s, properties in Albania were handed back to the people from the state. It is estimated that some 85 per cent of property has now been checked to have correct title deeds, but the remaining 15 per cent is mostly in Tirana and on the coast, so making sure your lawyer checks this is imperative.
Buy a property. The property buying process in Albania is quite simple and well-established. Once you have signed a reservation form and provided certified identification along with your reservation fee, you should always look to engage an independent lawyer that you have sourced yourself, in order to make sure the transaction is being carried out in accordance with the law and that you know for what you are signing.
Finance your Albanian property. Despite the fledgling free market economy in Albania, and the huge failure of the pyramid schemes in the latter part of the 20th Century, there is a wide and competitive range of products available in the mortgage market. Also, many of the larger western banks have entered into the market, making products comparable to the standards we are used to in the most developed economies. Terms are similar to other European finance products as well, with loans of up to 80 per cent of the value of the property and 15 – 25 years. Unlike many emerging markets, interest only mortgages are also available, though the recent economic woes of the major global powers have meant that credit across the world is much harder to find than it was previously. You also have the option to finance your property in Albania through raising finance on a property you own in the UK. You may find a more advantageous interest rate financing this way, and should you not have the 20 per cent deposit ready and available in cash it may give you the option to raise it through a part-mortgage on your UK home. The services of an independent financial adviser at this stage can save you significant amounts of money in the long term.
Be ready to pay the Albanian property fees and taxes. Transaction costs for buying a property in Albania are very low. There is no purchase tax, and property transfer costs amount to three per cent of the purchase price. Legal costs, including a public notary and your own representation should come to no more than €2,500. Once you have bought in Albania, running costs of property are also low. Municipal tax rates vary from location to location, but are typically €0.25 per square metre per year in the coastal areas. Income tax is just ten per cent, as is capital gains tax, which has only been in force since January 2008.
Get the appropriate visas, residency and work permits. Upon entering the country with a valid EU passport, you have the right to stay for up to 90 days without applying for a further extension of your visa. For stays of more than 90 days, and up to five years, you are able to apply for a residency permit at the nearest police station to your property. There are a number of documents that you need to have in order to gain this permit, some of which must be notarized, and some of which must be obtained from the courts and police services in your country of residence stating that you are not currently under investigation or subject to any criminal processes (the so-called ‘good boy letter’). Once again, with Albania pushing for EU entry in 2014, these restrictions will have to be relaxed to allow freer movement to other EU citizens, and the ability to cross borders and reside freely will need to be addressed.
From Wiki How . com |
Financing Your Overseas Property Investments
Buying a property abroad may seem like a great way to make money out of the property market and, in many cases, it is. However, working out the best way to finance this investment can cause more than a few headaches and getting it wrong could cost you dearly. Mortgages abroad More and more Britons are looking to purchase properties abroad, either as holiday homes, or more commonly, as a way of investing in potential growth areas. With European Union rules allowing its citizens to purchase property freely within other countries of the Union, it is little wonder that the demand for foreign property has soared recently. When it comes to financing a potential purchase, there are several things that a potential purchaser needs to consider carefully if they are to obtain the most cost-effective option for themselves as individuals. Raising Equity from a Current Property House prices in Britain have risen substantially, in recent years, meaning that most homeowners have the option of re-mortgaging to raise finance for a foreign purchase. According to the large banking institutions, this remains the most popular option for overseas investors. Anyone considering this option should be careful to consider all of the issues involved in re-mortgaging. Any finance that is received in this way is secured on the UK property, which, in most cases, is likely to be the primary place of residence. If for any reason, the repayments are not made, then the property in danger of repossession is the main residence and not the property abroad. One of the benefits of this type of financing option is when an off-plan property is being purchased. With off-plan schemes, it is common practice for the developer to require stage payments before the building is complete. At this stage, it would be virtually impossible to obtain any financing using the partly built property as security for the loan. If the funding is being received from releasing equity in another property, these stage payments can be met with relative ease, as the incomplete state of the overseas property will not concern the bank or building society. International Mortgage If the thought of securing your overseas investment on your UK home seems to be a little too much to bear, then an international lender may be a better option. International lenders, as the name suggests, deal with a variety of countries and generally have local expertise enabling them to deal with all the negotiations as well as the legal processes and any necessary paperwork. This is a wonderful hassle-free option for an investor, however, their fees tend to be considerably higher than a local lender because of the range of services that they offer. Some UK high street banks offer international mortgages, for example, HSBC offers French mortgages and Lloyds TSB offers Spanish mortgages. Using a Local Mortgage Provider Using a local lender may seem like a good idea if you do not want the extra costs of an international lender and you also do not want to use your UK residence as security. A local lender can act quickly and can ensure that the property is worth what you are paying for it, in a similar way to how a mortgage provider in the UK would behave. They complete all of the necessary searches, surveys and paperwork. Another advantage is that you will be borrowing in the local currency, so there will be no additional incurred costs from transferring cash from the UK to the country in which you are purchasing the property. Having said this, fees and interest rates may not be as favourable as those in the UK and you may find that the monthly cost on a similar sized mortgage could be substantially more. As you would be borrowing in the local currency you are, in effect, gambling on two separate markets, the property market and the currency exchange market, so you could gain or lose from fluctuations in either. Another potential issue can be that it is difficult to prove income to the satisfaction of a foreign lender and, therefore, you may find that you are limited in the amount that you can borrow by way of a foreign mortgage. If you consider raising equity on your current British property, you must accept that the additional sum that you add to your mortgage will incur interest, it will have to be repaid over the term or at the end of the term of your mortgage and that the whole loan is secured on your UK home. Anyone considering their options for financing an overseas property should consult an independent advisor or broker so that they can take into account your individual circumstances, in terms of both the property you are purchasing and the financing options available to you. Article Source: http://EzineArticles.com/?expert=Rod_Thomas |
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