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Underestimating the Level of Knowledge about the Local Real Estate Market
One of the most common HNWI purchaser mistakes is the failure to have sufficient knowledge about the local real estate market. Every country will have different dynamics, pricing trends and methods of doing business, which means that what may be available in someone’s local market may not be available in the market overseas.
Without having an in-depth understanding of the local market, HNWI can easily make an overseas luxury property investment significantly above market value or be outbid on a property in a premium location. At Singapore Luxury Homes, we provide our clients with curated real estate listings that are supported by an extensive amount of market data that allows them to determine which properties are best suited for their future enjoyment and greatest likelihood of providing maximum returns as an investment. To aid HNWI in making informed and strategic decisions, luxury property consultants Singapore Luxury Homes, provides our clients with market insights based on current local market conditions.
The Risks of Neglecting to Navigate Global Property Transactions Properly
While navigating the complexities of international property transactions can be quite overwhelming for even the most experienced real estate professionals, many high-net-worth buyers still make the mistake of failing to properly assess and navigate the legal and tax implications of buying overseas property.
Legal and Tax Considerations to be Considered
International property purchases comes with complicated legal, tax and contractual considerations. High-net-worth buyers often overlook critical legal and tax considerations, i.e., ownership restrictions, inheritance laws, property taxes, or capital gains tax regulations because they often assume these variables are not significant enough to impact their purchase or because they do not consult local real estate agents that are knowledgeable of local laws. As such, it is not uncommon for buyers who fail to conduct proper due diligence to find themselves with unexpected liabilities and risks associated with their purchase. To reduce the risk associated with these issues, Singapore Luxury Homes connects every client with local advisors who are well-versed in the local law and can assist with conducting legal due diligence, as well as provide tax advice and assistance.
Currency and Financing Issues
Currency fluctuation adds another layer of complexity to international property transactions. Many buyers do not consider the impact of currency and exchange rate volatility on the final purchase price of their overseas property, nor do they assume that their domestic financing solution will smoothly transition to an overseas purchase. To help their clients overcome the challenges posed by currency and financing issues, luxury property consultants Singapore Luxury Homes assist their clients in managing the foreign exchange process, evaluate cross-border financing solutions and provide clients with strategies to financially capitalise on their investment. By providing buyers with the true cost of their overseas investment in their home currency, Singapore Luxury Homes can help buyers avoid any surprises from currency fluctuations.
The Impulsive Decision-Making Process of Luxury Home Buyers
Buying luxury real estate is a major investment and has a significant emotional impact on HNWI clients. However, many of these investors make the mistake of quickly purchasing an overseas luxury property without doing enough research or visiting the property before making an offer. Just because a property looks perfect in photographs or online presentations does not mean it will fit your lifestyle or support your long-term goals.
Singapore Luxury Homes provides custom property tours for buyers (both virtually and in person) to help them experience the neighborhood, amenities and surroundings in person. Our team takes the time to work with clients to ensure each property they are interested in buying meets their investment objectives and overall lifestyle goals.
Purchasing for Aesthetics Only
Design and aesthetics are two important aspects of luxury real estate; however, many luxury buyers make the mistake of purchasing purely on how a property looks. Many times buyers will focus on how great the property looks and ignore other characteristics of the property that may be important as well, including; accessibility, future resale value, security, and infrastructure.
Singapore Luxury Homes offers clients detailed information regarding each property, including information on the quality of the building, the community, and future growth opportunities. We work with our clients to ensure they are investing in a beautiful property but also making an informed investment decision by providing equal attention to both the style and substance of the property.
Not Utilizing Expert Networks
Many high-net-worth individuals (HNWIs) attempt to purchase international properties themselves with the assumption they’ll be able to manage them by using online resources or their own contacts. Unfortunately, they do not take into consideration the benefits of having a well-connected network of real estate professionals, legal advisors and local experts.
Singapore Luxury Homes leverages its network and local knowledge so their clients have exclusive access to premium listings, some of which may not be made available publicly. Their level of service is at a concierge level, which means they handle every step of the buying process with care and confidentiality, from negotiations to the final closing with greatest precision.
Not Considering Post Purchase Property Management
Lastly, some of the purchasers forget about property management once they’ve purchased a luxury property abroad. Luxury property ownership abroad includes continual responsibilities such as maintaining your home, managing a local staff, and timely compliance with local laws and regulations.
Singapore Luxury Homes takes care of more than just the purchasing process. They provide guidance in regard to the most effective property management solutions so that their client has a seamless experience after the keys have been turned over. Their assistance to the new buyer helps to maintain the value of the property and also allows for a worry free experience when enjoying the new property.
Conclusion
For wealthy individuals, buying luxury property overseas can be a fulfilling experience if done strategically. For affluent buyers to enjoy both lifestyle appeal and financial investment returns, it will be necessary to avoid common luxury real estate investment mistakes, including but not limited to: Failing to complete their due diligence (research) on both government and environmental regulations; and failure to obtain necessary financing; and Ignoring risk factors associated with financing sources.
Singapore Luxury Homes is a proven partner in all these areas. Our highly curated properties, detailed understanding of the marketplace and personalised concierge service allow for a truly ‘pain-free’ purchase with confidence in a decision that meets the buyer’s requirements. With Singapore luxury property experts, HNWI clientele can address the foreign luxury real estate risks that frequently occur while purchasing luxury real estate internationally and will ultimately enhance the quality of their investment portfolios and lifestyles.
