The Consumers Association of Singapore (CASE) on Monday reminded property investors here about the potential risks involved in investing in overseas properties and advised them to be cautious.
The organization received 13 complaints in 2013 and 2014 from consumers regarding their purchases of foreign properties.
Some of the cases involved a loss of large sums of money of more than $100,000 by the consumer.
“Investors should remain cautious about these high risk investments and keep in mind their financial needs and commitments as well as the risks involved,” said CASE president Lim Biow Chuan.
Meanwhile, CASE has provided the following advice for investors:
1. Weigh the commercial risks involved before investing in high-risk, large sum investments such as foreign properties. If you are not prepared to take such high risk, you should stay clear of such investments.
2. Always do your research on the foreign property before embarking on the purchase. Check whether there is over supply in the market or if there is government approval for the project, etc.
3. Check on the financial reliability of the developer as well as the reputation of the company marketing the properties. A positive track record of the developer helps to minimize risks that the developer would become insolvent and cease the development of the property.
4. Be prepared to hold on for a long period of time before you see any return on the investment. This makes investment in foreign properties unsuitable for people who may have other needs for their cash which may be tied up for a period of time in the foreign property.
5. Do not commit to a purchase based on advertisements with attractive promises of high yields and guaranteed returns without doing the necessary homework.
6. Read and understand the terms and conditions of the contract carefully. If the documents are written in a language you do not understand, ask for a translated copy of the contract. If you are in doubt on any matter, always get advice from appropriate experts such as a lawyer.
7. Note that the applicable laws in other countries may be different from Singapore and the process of dealing with disputes can be complicated and cumbersome. The process may take years to come to a conclusion (if ever there is a conclusion) and the cost of pursuing your dispute may be rather high.
8. Investors that have a dispute with the investment company or developer should seek legal advice.
Romesh Navaratnarajah, Singapore Editor at PropertyGuru, wrote this story. To contact him about this or other stories email firstname.lastname@example.org