It's a sorry state of affairs we seem to have ourselves in at the moment, with the gloomy news all around us that we are facing a financial crisis worldwide, with currencies flopping about like stranded fish, and exchange rates either going through the roof or sinking below the basement, depending on which way round you're looking at it. Those businesses and investors who work on an international or global scale are struggling to identify the best way to work, and simply keeping abreast of the current exchange rates is almost a full time occupation.
It used to be the case that we would simply pop to our local shop or town and buy the items we needed in our local currency. We'd think nothing of it, of course. However, with so many of us now buying products online, we no longer even think about the country that the company is trading in. Often we see that the prices are listed in dollars, or Euros, and think very little of it. Some people change the currency to their own local one, but in fact if you do a quick, independent currency exchange rate check, you'll often find that buying products in one currency will be cheaper than buying it in another, possibly your own. Since some companies online have their converted prices fixed for a few days at a time, a significant change in rate can make a big difference.
If you're in the property market, and in particular looking at investing overseas, this problem with sliding exchange rates becomes extremely challenging. One day the deal looks good, but within a couple of weeks you're starting to look at the same deal and realise that, as a direct result of the exchange rate, you've just lost several hundred pounds, dollars or Euros, and possibly even more than this. Even investing in a fairly modest 100,000 property, a change in exchange rates between pound sterling and Euros of just a few pence can make several thousand Euros difference. If you're quick, then this can be good news, but usually you have enough to worry about without pouring over all the bank rates and exchange rates and currency conversions.
The reason I'm writing this is to point out that the sky may look bleak and grey as far as overseas investment is concerned, but there are silver linings around, and I think I have just found one which looks more like gold! I came across an overseas property investment company that appears to have got stuck back at the beginning of this year when rates were good, but either hasn't noticed that rates have slumped since then, or simply don't care Either way - it's rich pickings for you if you're into investment overseas. The current rate is 1.26 to the pound, yet the company I've seen is offering 1.40 to the pound - an 11% difference! To come across this kind of rate in today's financial market is well worth a second look in my opinion.
To put this kind of benefit into perspective, let's say you were looking to buy a very reasonable 150,000 property over in Spain, but were looking at an exchange rate of 1.26 to the pound - which is normal. By taking advantage of the 11% difference in rates that this company is offering, you could make a saving of over 16,500! I defy anyone who's considering overseas property investment to turn their nose up at such a chance!
Obviously when purchasing property overseas it is important to bear in mind the currency exchange rate, and it is always recommended that once you start to look seriously at the prospect of purchasing property abroad you agree an exchange rate with all parties and have this included in the written terms so that you don't fall foul of any unpleasant shocks that hit the financial world later down the path. A major change in an exchange rate can result in costing you many thousands of pounds extra, so this is sound advice. Further sound advice would be to take advantage of a company who is hopelessly optimistic enough to offer an exchange rate that refuses to move on from the sunny times at the beginning of the year, and is still offering a rate that is considerably higher than anything offered by the banks. Such an opportunity makes moving abroad more like going on holiday!
Investing in property overseas shouldn't be about gambling, but necessarily whenever purchasing property, you have to be aware that prices fluctuate, rates vary, and you could find that, whilst long term you're bound to make a tidy profit, the short term is usually unpredictable. If you're lucky enough to find a company like the one I have come across that's offering an exchange rate drastically below that offered by banks or other financial institutions, then you immediately remove a large chunk of that risk - over 11% of that risk in this particular case. By saving yourself tens of thousands of Euros off the price, you could immediately sell the property on at the normal going rate of exchange and make yourself a quick 11% profit! Clearly that would be unlikely to attract many people, but what is attractive is the chance to create a safety net to help you get through the short term, and enjoy your long term investment.
If you're considering investing in property abroad for the first time, you may already have some idea of the differences between buying at home, and buying in a different country. With various regulations and requirements that take a good deal of getting used to, you may find that the budget you had in mind will be stretched a little further than you anticipated once the cost of lawyers, solicitors and other paperwork comes into play. By fixing an exchange rate well below that of the normal going rate, you help to give yourself enough slack to easily absorb the extra costs that may be incurred. All in all, it's an offer well worth you taking further if you're serious about investing.
About the Author:
If you are searching for some super spanish property deals then check out this URL. They provide preferencial exchange rates of 140 euros to the pound on selected properties on the Costa Blanca and Costa More thanlmeria. More than 15% saving on current rates on some superb Spanish properties
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