Renting a house
If you’re moving overseas, one of the first important decisions to make is whether you will rent or buy a house abroad.
Most first-time expats will rent to begin with, as this is the more flexible option. Should the move not quite work out as planned, it also allows you to get to know a region and to then be in a more informed position in terms of specifically where you would like to live long term.
In some countries you may not be allowed to buy property straight away, leaving renting as your only option. Financially, buying a property may simply not be feasible for you at the point of moving. Perhaps you have a house back in your home country that once you have settled in your new country, you plan to sell to finance a new house purchase. In this situation renting temporarily would be the answer.
For example, Singapore and Hong Kong are among the most densely populated places on earth. Demand for housing is high and with the limited space, property prices have soared. As a result, it is not unusual for individuals and families to rent their home for their entire lives.
Further afield, according to The Zebra, 77% of the people in the US prefer to rent instead of buying a home in 2021. You should expect to pay at least 30% of your salary on accommodation rent. You don't have to pay property taxes, maintenance costs and a sizable down payment, and moving out is likely going to be far easier than moving out of a home. The lease agreement can be used as a proof of residency to enrol for district school.
If you have decided to go ahead and buy a property in your new location, then this brings a whole new set of considerations – primarily from a financial perspective.
Buying a house
It is important to highlight that in many parts of the world, and significantly in most parts of western Europe, there is a “renting culture”. With buying, property prices can rise so there’s also the consideration of how much growth you’ll see in your equity, that is, the amount of your own money tied up in your home.
In some places, buying is more amenable than renting. More than a half of regional Australian properties are cheaper to buy than rent in the middle of last year according to CoreLogic, thanks to the record low interest rate costs on mortgage debt. Specifically in the suburbs, where cost of buying a home is reduced and property values have increased, making it a more attractive option. There are also, as of 2022, recent trends at play here. The pandemic triggered domestic tourism and work from home restrictions pushed up the rent in some regions.
If you are buying another property besides your current home before you move, even if the property is abroad you may have to pay extra stamp duty, depending on your residing country’s tax system. Be sure to investigate this and other financial rules around overseas homes fully.
Overseas property markets
The market for buying or renting a property differs greatly from place to place. You will also have your own set of requirements that you wish your next home to fit. As with any big decision, you should do as much research as you possibly can to establish your best options.
If you are being relocated by your employer, there is a good chance that home search services are being provided. If not, then you may want to consider finding a relocation expert or a qualified property lawyer to help. Your advisers will be able to oversee the whole process and can advise you on how the procedure works. They will also be able to translate documents and assist with negotiations in the host country’s language and can look over the contract before you sign any documents.
The internet of course also provides a wealth of information, as just three examples:
- In Southeast Asia, you can check out PropertyGuru for online property choices and pricing.
- In the U.K., Propertymark provides a credited source of practising agents helping people to buy, sell and rent their treasured homes, Rightmove or Zoopla are two of the largest home search portals.
- In Canada, Kijiji may be a choice to look for apartments for rent or for sale.
Expat mortgage advice
While mortgages can be complex and take time to get the agreement in place, there are several mortgage products and lenders that are specialists when it comes to helping with expats’ borrowing requirements and circumstances. Financial specialists will be able to explain the process and will be able to tell you how much the mortgage fees will be.
For more home search information or to get a free moving quote, feel free to get in touch with our relocation specialists.