You've聽fallen in love with a home聽that's聽incredibly affordable but needs renovation. As an adventurous expat,聽you're聽brimming with ideas to turn a modest house into a mini-castle. But what should you consider in this type of negotiation? How can you ensure your dream聽doesn't聽turn into a costly nightmare?
Buying and renovating property: A growing trend among聽expats
This聽is reminiscent of the story of聽'akiya'鈥攅mpty houses in Japan seen as a symbol of the demographic crisis. The Ministry of Internal Affairs reports over 8 million of these homes and aims to rejuvenate them. Many expats are eager to acquire these abandoned properties, a聽trend聽that's聽growing.聽More and more expats聽are sharing聽their聽'akiya'聽adventures on social media, like Anton Wormann, a Swedish model living in Japan.
However, some expats find that unexpectedly high renovation costs outweigh the low聽cost聽of purchasing. Homes riddled with issues like structural weaknesses repeat this narrative across various countries. In pursuit of a bargain, many expats are now choosing to invest in real estate differently鈥攂uying聽with the intention of doing聽the renovations themselves (DIY). This trend aligns with the second-hand movement, driven by a greater focus on green economics, environmental respect, and budget control. Indeed, for many expats, this聽type of聽property acquisition is more about saving money than buying new homes. But how can you be sure of getting a good deal?
Key considerations when buying and renovating property abroad
To avoid scams and ensure a good deal, resist聽impulse-buying. An old property may be charming and seem like a wise investment, but it can also come with substantial renovation costs.
Questions you need to ask before buying a cheap property
Before you commit to a cheap property abroad, consider the following:
- Why do you want to own property? Are you looking to invest, or will you live there?
- What's聽your total budget, including renovation costs?
- Why is the property for sale?
- Through which agency or network did you find this property?
- What is the current state of the property?
- Are you aware of any previous renovations? Were these聽major聽structural changes? Who carried them out?
- What's聽the neighborhood like? What is the condition of the surrounding properties?
- Can you estimate the renovation costs?
- Do you plan to do any of the renovations yourself? Do you have the necessary skills?
- Are you supported by local banks and insurance companies?
- How long will the聽renovations聽take before you can move in? What are your plans in the meantime?
Things you need to know before buying an old home abroad
Take time to get answers to the questions above.聽Keep in mind聽that you might聽not always聽learn why the previous owners are selling.聽Gather as much information as possible about the house, regardless of its condition.聽
Even a seemingly decent property can hide many issues. Pay special attention to any existing renovations and modifications. You need to obtain the original house plans to understand what has聽been done, when, with which materials, and by whom.
If renovations were done by previous owners,聽make sure聽they meet all local safety standards (electrical systems, heating, plumbing, etc.).聽Pay particular attention to the roof, especially if you are considering purchasing a loft. Some expats drawn to lofts that look fine on the outside have ended up with structures that leak.
Buying and renovating a home abroad might seem like a dual benefit鈥攜ou get a deal and help the planet. Buying an older home is indeed more eco-friendly than purchasing a new one. However, the actual benefit depends on the needed renovations. If the house is not energy-efficient, the environmental benefits diminish.
How to secure a good deal
Before you start house hunting, be sure about your project. Where are you planning to move abroad? Is your financial situation stable?聽Assess your desires, needs, and actual capabilities, both聽financially and emotionally.聽Undertaking a buy-renovation project requires money and time, especially if you decide to do much of the work yourself.聽Don't聽underestimate聽the importance of this project.
Did you fall in love with a charming century-old house on a hill? Be cautious about your future聽home's聽location.聽Don't聽embark on an impractical project. Does the local government allow you to renovate this property as you wish? What are the construction permit rules?聽
Depending on the city you are聽setting聽in, local urban planning might restrict聽certain聽changes.聽The PLU might also have plans that conflict with your聽property's聽location鈥攔esearch thoroughly before聽proceeding with the purchase.
Don't聽underestimate聽the costs associated with renovations, the waiting time before moving in, and ongoing expenses.聽Plan for potential setbacks (like a drop in income) so you can respond appropriately.
More tips for buying and renovating a cheap home in a foreign country
Surround yourself with professionals: architects, urban planners, legal experts, and聽real estate professionals in your host country.聽While you may聽not聽be聽familiar with聽all the local real estate laws, consulting professionals can save you time and money.
Do your research:聽Working with professionals聽doesn't聽mean you should be passive. Stay active in understanding the explanations and the scope of your project.
Don't聽settle for a single house visit: Explore your future neighborhood multiple times, at different times of the day, over several weeks. Likewise, thoroughly inspect the house. Ideally, bring experts who can better estimate renovation costs and advise on the feasibility of the work.
Watch out for moisture and mold:聽No one wants to buy a house,聽cheap though it may be,聽that's聽infested聽with pests, asbestos, or plagued by dampness.聽Carefully read expert diagnostics on the聽house's聽condition.
What are the local laws regarding asbestos and soil pollution?聽You聽might need to聽remove asbestos, which could be costly.聽Consulting with professionals is crucial to assessing聽the cost-benefits of your project and adjusting it if necessary.
