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

Hi Again

Esay answer - Let the developer carry the risk !!!

Ask to pay a fixed price in your own currency - no problem then is there.


.

__________________

Is every developer flexible?????

Probably you are the one who is, good to know!

I'm relatively small so MY total exposure by selling in UK sterling, to UK owners is limited.

However I would have thought that this could be used to advantage by the developer as a way to reduce the risk for his "customers".

Maybe the difference for me is that I'm in the minority being a UK developer building in Egypt, maybe most developers are in the country where they build & sell and only deal in their own currency ???

.

__________________

Dave,

finally you came to some positive answer on my threads.

I am very happy for that.

Do you want to talk to Smart as a developer?

Can be done!

__________________