The Property Market
Buying not Renting



Not Your Castle

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The property market is a business. Like any other trading there is no room for sentimentality or the development of a personal attachment. The goods being bought and sold, the property, is the stock. A house may be someone's castle but, as a dealer, it is not yours. Buying low and selling high is the object of the exercise. It may be that the property is just land. No improvements, no buildings need be involved. All that matters is that the price should be higher when the time comes to sell. Perhaps the reverse should be the emphasis. When the price is higher it is time to sell. Property is not as liquid as most goods, even shares are more easily converted to cash.

The Property Market Abroad

Title

Dealing in land has peculiarities over the buying and selling of other goods. These differences relate to the title systems which are in force in the jurisdiction where the land is situated. It is beyond the scope of this short piece on property markets to delve deeply into title systems but those dealing in land should make themselves familiar with the practices in force in the areas in which they propose to deal. The safest areas in which to buy and sell land is where a Torrens system of title exists. In this system all of the details of the land and its ownership are displayed on the document of title and the state guarantees the veracity and validity of such title. Such systems operate in countries as widely spread as Canada, The Dominican Republic, Ireland, Singapore, Australia and New Zealand. This list is not exhaustive. In other places transfer takes place only after extended and lengthy (and expensive) searches of transfers from the time of the first passing of the land from the Crown or state to a private owner. Any irregularity in a previous transfer could mean that the current apparent owner is unable to transfer the title to the buyer.

Secure Title?

The delays that could result from a doubt in the legal ownership of a seller are not what any buyer who is making an income from trading in property needs. It is necessary to be careful even where a Torrens title system is in force. In Mount Isa in Australia all residential and commercial property is held by lease title only. There is no freehold title. The lease term is 99 years and no-one has any doubt that this will be extended. the property market here operates as it would as though freehold title was available.

Nothing remains static. Again in Australia a "new" title was recognized recently. It is called "Native Title". It belongs to Aboriginal tribes which can prove a continuous association with the land concerned since Australia was "discovered". A grant of Native Title to an Aboriginal group gives it certain rights of access and determination of the use to which the land may be put. The complicating factor is that Native Title can co-exist with certain other titles, particularly leased land. Freehold title extinguishes Native Title. So the cities and towns of Australia where titles are predominantly freehold or strata titles have no problems with Native Title. The vast areas of Western Australia and the Northern Territory where the great leasehold areas of the huge sheep and cattle stations (ranches) exist are still in the process of having claims to Native Title assessed. Once granted there follows negotiations between the "new" title holders and the leaseholder of just what, precisely, the Native Title holders may do on the land. This process will continue for many years.

Legalities and Local Practice

It is likely that the first dealings in land will be in the country of a person's origin or immediately last longest residency. The details of title systems and local practice in the financing of property deals will be familiar. If property dealing is to be a good income earner then it is likely that opportunities will be discovered in other countries. The complications of title systems have been mentioned but there are other things which can be unusual. It would be impossible to cover all differences across many countries.

It's Legal!

By way of example it should be known that it is impossible for a foreigner to own land in the Philippines, although title to it can be acquired by inheritance. The improvements on land, such as the house, can be owned but the best a foreigner can do so far as the land is concerned is to lease it. A twenty-five year lease with the possibility of renewal for a similar term is allowed. For the average retiree this could be satisfactory. It is also unusual, again in the Philippines, to finance purchase by way of a mortgage. The system is more like one of pawning and re-pawning for successively lower amounts over periods often as short as five years. Companies must be sixty per cent owned by Philippine citizens in order to own property.

Local Practice

The only safe and sure way in dealing in the property market abroad is to engage a good local agent and lawyer. Fostering good relations with a local bank will also be of value. Getting the benefit of the experience of someone who has bought and sold property abroad would be invaluable. The risks in this are clear and any advice should be compared with information from all other sources. Earning an income in the property market on a world wide basis may not be easy but if that is your area of expertise the returns could be good although perhaps a little "lumpy" compared with the regular payments from share dividends or an annuity.


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Malaysia

The Philippines

Panama

Colombia

Dominican Republic

Uruguay

Dominica

Ecuador

Belize

Australia

New Zealand

Canada

Retirement Abroad - Your Complete Resource

A Short English Grammar

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