Reply To: Warning from Moneyweek!

#94353
Anonymous
Participant

Appologies if I’ve posted this before: Written in early 2005.

Well over a million Britain’s now own holiday homes abroad. Our love affair with owning ‘a place in the sun’ has never been greater. As ever Spain, France, Italy and Portugal are proving popular. More recently as prices have been pushed up in these countries we’ve looked further a field. To places like Slovenia and Croatia in what was the old Socialist Federal Republic of Yugoslavia. You can’t beat the Dalmatian coast only don’t dig too deep in the back garden, as mass graves are commonplace and 20,000 bodies are still unaccounted for. They don’t put that in the sales presentation. Recently Latvia, Bulgaria and Romania are being pushed as the next hot, ‘Fly to Buy/Fly to Let’ leading edge locations. When buying abroad its important to recognise that the laws, processes, customs and practice, for the transfer of unencumbered title to land and property, are not the same as in the UK. We hear horror stories, where unsuspecting Brits having bought abroad, only to find themselves with no end of problems, having either been duped or failed to take appropriate precautions. Be it problems with the escritura (title deed) or building permits in Spain, Villas built on war expropriated land in Northern Cyprus or inheritance/tax issues in Monrovia. As mentioned earlier with countries like Romania and Bulgaria now being pushed as destinations to buy holiday homes, the term Caveat Emptor has never been more appropriate.

If you’re not entirely happy with the reputation for honesty of Estate Agents at home here in the UK, wait till you meet some of the ex Transylvanian Donkey rustlers selling unsuspecting Brits holiday homes in Tulcea and Constanta on the Black Sea! Where next? Ski lodges in Nagorno-Karabakh, just 8 days yak ride from Baku international airport. Or Beach Villas on the Aral’s Sea health Spa, specialising in chemical body scrubs, with all the toxic pollution you can drink. “Prices start at 3 million Dram (£15,000), 10% discount if you buy off plan. Legal title guaranteed by The South Caucasus Development Corporation of Kazakhstan All deposits underwritten by the Bank of Chechnya, as advertised on Channel 4 by the regional goodwill ambassador Borat! Don’t miss this ground floor, investment opportunity of a lifetime”……….. I mean seriously they are now advertising apartments in Ulaan Baator Mongolia, to us Brits, as a fly to buy investment destination. The decedents of Genghis Khan must by laughing into their celebratory ‘airag’ (fermented mares milk) cocktails!!!

Don’t let the next, up and coming, leading edge location that’s being pushed as a must have investment, turn from leading to bleeding edge for you!

I can only think that on arrival in a hot country the caution we would normally exercise when about to spend (and in most cases borrow) a life changing amount of money, goes out of the window. Maybe it’s the heat, the warm sea, the swaying palms and unfamiliar, intoxicating, aromas of the exotic, which relaxes our guard. Alternatively it could just be that our natural caution is blunted by materialistic desire, brought on by greed, masking itself as a dream in which many temporarily part company with commonsense. There are many great investment opportunities out there, but to safely take advantage of them you need to exercise the same level of caution and due diligence, you would back home and then some!

Pablo silver or lead?