These tips will put you in good stead for buying your dream property overseas. With a little preparation and research, you’re well on your way to moving in without taking a hit to your personal finances.
1. Keep on top of currency movements
When moving abroad, one of the most important things to understand is how currencies can change in value against one another. A whopping 40 per cent of Brits don’t understand the impact exchange rates can have on their finances, but they can have a huge impact on your pocket if you’re moving from one country another so it’s worth reading up before you go.
40% of Brits don’t understand the impact exchange rates can have on their finances
Use sites like Google Finance or Yahoo Finance to get ahead on the current value of the pound against the currency of your chosen destination. An understanding of what’s been happening over the last six months is one way to set realistic expectations for where a currency might be heading – so try budgeting around that.
2. Consider the cost of living
When moving abroad, don’t just assume that the cost of living will be exactly the same as it is at home. You may be getting a great deal on the property, but be sure you’ve taken the little things into account as well – they may surprise you!
Think about the location of the property. If it’s out in the sticks, will you end up spending more on travel every month than you do back at home? How far is it to the nearest supermarket? And how much does it cost to fill up a tank in your lovely new country?
Look into electricity bills, the cost of food and local taxes – it always pays to be prepared!
3. Don’t lose money on international transfers
Many people don’t know about the variety of options available when it comes to sending money overseas – indeed, 39 per cent of Brits admit they’ve no idea of the best method.
Like anything, it pays to do your research. Many people rely on their banks, but in fact, this is not usually the most cost-effective way to move your money overseas. Exchange rates are often uncompetitive, and on top of this, you may be charged hefty fees.
Instead, try getting a few quotes from FCA-regulated money-transfer companies, asking questions around pricing transparency to ensure you’re getting a deal that lasts.
4. Understanding your payment options
Once you’ve chosen your provider, there’s more than one way to transfer your money overseas:
- Spot rates - this is the simplest way to transfer your money, accepting today’s exchange rate to transfer your money right away
- Forward contracts – If you like the current exchange rate but want to transfer money later on, a forward contract will allow you to it in for a set date in the future
- Limit orders – Don’t like the current exchange rate, and want to wait until something better comes along? A limit order allows you to do just that, with your currency specialist watching the rate to help maximise your budget.
- Do you know how much things cost in the UK? Take our quiz and find out here!