J
Janoulaki
New Member
It is all nice to purchase off-plan and to get a contract for payments. But none of the developers will tell you about the currency fluctuations and because of the lack of your preparetion you will end up paying more for your property than the price was agreed.
What are the top three ways that can cause the cost of your overseas property
investment to increase by 5% or 10% or even 15% in the matter of months or even
days?1. Project costs overrun from the original projections (hopefully your
solicitor will have ensured that any overruns are absorbed by the
developer… not you) or…
2. Add-on costs that you agree for after signing the original purchase
agreement (this could include an upgrade to the original value of any
*extras* you want such as getting better tiles for the bathroom) or…the
worst could happen:
3. The local currency appreciates in value before you need to pay for the
property. (This is a REAL PAIN because you could have actually
benefited from a change in exchange rates and made money rather than
losing it if you had a strategy in place).
By reading about the following strategy YOU CAN avoid one of the top ways people
lose money and SAVE YOURSELF £££’s.
It never ceases to amaze me but people shut their eyes to the currency risk they are
exposing themselves to when buying overseas.
Why is currency management so important?
Significant CASH losses can be made if your currency exposure is not handled correctly.
Imagine that you bought a property for € 300,000. If the exchange rate was Euro1.50/£1,
the sterling cost would be £200,000. If the Euro strengthened to 1.44, the cost would be
£208,333, a cash “loss” of £8,333.
You would have to fund this “loss” with additional money from somewhere; from surplus
cash funds (could be wishful thinking),additional mortgage facilities, using an overdraft
(short term liability matched by long term asset is a recipe for disaster).
You may think that the above is an extreme example. It is not. I speak to a number of
people daily who have or who know of people who have experienced similar or worse cash
losses.
One person I spoke with had to find an additional £17,000 due to failing to consider
his currency strategy.
Think before you buy!
IF there are people interested in the currency strategies or exchange please send me a message
What are the top three ways that can cause the cost of your overseas property
investment to increase by 5% or 10% or even 15% in the matter of months or even
days?1. Project costs overrun from the original projections (hopefully your
solicitor will have ensured that any overruns are absorbed by the
developer… not you) or…
2. Add-on costs that you agree for after signing the original purchase
agreement (this could include an upgrade to the original value of any
*extras* you want such as getting better tiles for the bathroom) or…the
worst could happen:
3. The local currency appreciates in value before you need to pay for the
property. (This is a REAL PAIN because you could have actually
benefited from a change in exchange rates and made money rather than
losing it if you had a strategy in place).
By reading about the following strategy YOU CAN avoid one of the top ways people
lose money and SAVE YOURSELF £££’s.
It never ceases to amaze me but people shut their eyes to the currency risk they are
exposing themselves to when buying overseas.
Why is currency management so important?
Significant CASH losses can be made if your currency exposure is not handled correctly.
Imagine that you bought a property for € 300,000. If the exchange rate was Euro1.50/£1,
the sterling cost would be £200,000. If the Euro strengthened to 1.44, the cost would be
£208,333, a cash “loss” of £8,333.
You would have to fund this “loss” with additional money from somewhere; from surplus
cash funds (could be wishful thinking),additional mortgage facilities, using an overdraft
(short term liability matched by long term asset is a recipe for disaster).
You may think that the above is an extreme example. It is not. I speak to a number of
people daily who have or who know of people who have experienced similar or worse cash
losses.
One person I spoke with had to find an additional £17,000 due to failing to consider
his currency strategy.
Think before you buy!
IF there are people interested in the currency strategies or exchange please send me a message
