Buying Property Overseas

Buying property overseas is becoming an increasingly popular form of investment. UK property is rather risky and although there are signs of life in the domestic market, many people feel, possibly rightly so, that they could make more of a profit and at a low investment level than they could in the UK.

In Morocco for example, property prices are typically 50% lower than they are in Europe but you are still likely to see a 15-30% return on your investment per annum. Plus as tourism increases in the area, rental income potential also goes up, giving you both a short- and long-term way to make money.

If you need to scrape together some extra cash to help fund the purchase of your overseas property, then here are some ideas of where you can store your cash.

Cash ISAs are an investor’s best friend right now. This year, thanks to an allowance increase, you can invest up to £5,100 in a cash ISA. All the returns your make are completely tax free and with rates at just below 3% you should be able to make quite a bit of extra money this tax year. What’s more, they are not linked to the stock market so you won’t lose any money and they are truly flexible. As long as you don’t exceed the £5,100 over the year, you can withdraw and deposit cash when you need to. Of course you must remember, that the more money you have in there, the more you will get back at the end of the year.

Next up is a savings bond. Although you have to pay tax on the gains your make from these accounts, the rates are higher so it often doesn’t matter. If you want a more long-term investment and have more money to save then these are the best accounts to go for. If you can lock your money away in a bond for at least two years, and you have over £10,000 or so to invest you can get 3.5% AER, which is fixed for the entire term. These aren’t as flexible, but the more attractive rate usually makes up for it. But remember that bonds should be viewed as mid- to long-term investments and you may be penalised if you withdraw your money early.

Santander offer some of the best rates on savings accounts right now, including ISAs and bonds.

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