Typical problems encountered when investing in an overseas rental property

Simon Conn

September 22, 2017

Simon Conn is an overseas property and finance expert

The opportunity looks enticing, but when considering purchasing a property outside of your homecountry, beware of the pitfalls which could cause concern in the future.


Purchasing on the coast can seem attractive, but the cost is normally much higher than buying further away, although the number of potential tenants may be higher and rentals received could outweigh the savings of purchasing inland.

Also, if you purchase inland, if it is too far away from the coast you are restricting the type of tenants to those who have a car, who prefer more rural settings and, if they have access to a pool, families with very young children who may prefer the quieter setting over the hustle and bustle of the beach.


Is the property going to be full year-round? If it is on the coast, consider what the weather is like throughout the year and whether rentals have to be adjusted accordingly. If inland, is access available throughout the year, or, if in the mountains, is it suitable for both winter and summer visitors?


Who will look after the tenants when they are staying at your property and when they eventually leave? And who checks for any breakages, cleaning of the premises and laundry?


Check whether you are allowed to rent in the area and, if you are, whether a licence is required. Do the rules/licence change if the rental is on a short/holiday or long-term basis? These conditions should be checked with your local lawyer.


Who will ensure your property is regularly maintained, for example painting and minor repairs? This includes fixtures, fittings and electrical items around the house, as well the building itself. Allow time between tenants staying for major repairs to be carried out.


How easy is it for you or your designated representative to sort major problems, such as fire, flood and injury to a tenant while staying at the property?


Does the buildings (and contents) insurance cover you for tenants in the property and does this change depending on whether it is a short/holiday/long-term let? Again, check with your lawyer to avoid any headaches.

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