The Main Reasons For Purchasing A Foreign Property - Part 1

There are several broad reasons that people may have for purchasing a property from abroad. Here are some of the main ones:

They wish to relocate to a geographical location that better suits their lifestyle, income and circumstances. For example, in the UK a surprisingly high number of people emigrate to Spain because of it’s climate, relative low cost of living and the cheaper property prices.

They wish to purchase a foreign property as a form of financial investment. Increasingly, property investment is being touted as the "ultimate" fool-proof way of achieving long term financial gain. Some people are now even using property investment as their main financial provision for old age.

They wish to purchase a holiday home. This is mainly for those who have the resources to purchase a property in their favourite part of the world – somewhere they enjoy visiting, perhaps where they can laze away on the beach and enjoy the fruits of a completely different environment.

Some elderly people may wish to purchase a property abroad for retirement. Often, couples in their twilight years may find that their current life has changed dramatically. They may live in a large house (too large now the children have flown the nest), wish for a slower pace of life or may simply want to move somewhere different for health purposes (for example a less cold climate). More elderly citizens relocate than is commonly thought.

Whatever the motive, there are many advantages and disadvantages that should be considered carefully before taking the huge step to purchase a foreign property. A property is one of the biggest financial investments that an individual can make during their lifetime.

HOW TO MAKE $20.00 FOR EVERY $1.00 INVESTED

It has been said you can lift the Rock of Gibraltar if you have a fulcrum point and long enough lever. When we refer to "financial leverage" we are talking about the same principle. If you buy a business building for $100,000 with $5,000 down, this is using leverage of 20 to 1. For a mere 1/20th of the purchase price, you actually own and control property that is 20 times more valuable than your cash investment.

If the income of the building is only sufficient to make the payments and expenses and you don't gain any cash flow, you are still getting the building paid for and perhaps in 5 years or so,with continuing inflation, you can sell the building for$200,000... a gain of $95,000 on a $5,000 investment. This is the potential result of proper use of leverage.

A good rule to follow in applying leverage, relevant to any business venture for that matter, is always provide a reserve.Hold back some cash for emergencies. Hold back additional capital so if you go under you will have a nest egg to start a new venture.

Sometimes when things go sour and there is no way out it is better to take the least loss possible, save what you can and getout...NOW! Use the remainder to again find financing, marginleases, mortgages, franchises and all the other manners of using money belonging to others for both their profits and yours.

Selling your property for cash then leasing back on a long term lease is an other form of leverage. If you sell for one million dollars cash and lease back at $10,000 per month, you have generated tremendous leverage. You now have $1,000,000 each with10% down for each property, you now control 10 millions dollars worth of income producing properties. Sometimes it is possible touse options to hold property, with very little cash down, untilyou can obtain title and take possession. This can produce fantastic leverage if planned property.

Going public is an other method used to gain leverage by usingother people's money. You receive money from the public forshares of your corporate stock and at the same time establish a market value for your unissued stock.

Before you apply leverage on any proposition, be sure know just what your are doing. There must be a continuous favorable cashflow to service your debt, pay all your costs and expenses andgive you a reasonable profit. If weakness occurs in any one or several of your business entities, it could drag down your entire organization.

2. IN FRANCHISES

Franchising your business operation packet is another form of leverage. You are selling others your know-how and the right to use your system and/or product for a price, either a share of the profits, a bulk payment or a combination of both.

It is not as simple as it used to be to become a franchiser, due to controls and red tape established by the various state and governmental agencies. In some states it is just about impossible for the layman to proceed to wade through all the red tape required to satisfy the laws. However, if it were easy to do, it probably would not be profitable anyway.
When you have met all the requirements of the various agencies,you will have an operating manual and pro-forma accounting statement...You will have developed a turn-key package for your franchise offering.
To get started right get revised statutes of the state from theSecretary of State and study the requirements for establishing and selling franchises.