Currency
When a property purchase is agreed you can calculate the
approximate cost in the domestic currency based on the prevailing exchange
rate, but this figure will fluctuate with changing exchange rates.
As no one can accurately predict future exchange rates, it is important to
minimise currency risk if the transaction is sometime in the future. Our
currency partners, Baydonhill can solve this problem with 'forward currency
contracts'. A currency rate is fixed and you agree to buy a given amount of the
foreign currency at a future date, paying 10% of the transaction now, and the
rest at the future date. Effectively, you fix your budget now and pay later.
Contact Validus to get more information or to speak to our currency partners.
Another currency issue is that if local mortgage repayments are being made from
a domestic income there is also the potential for unfavourable exchange rates
to negate the benefits of lower local mortgage interest rates. Again, this
depends on the state of the currency in the local economy and can only be
judged on a case-by-case basis. However, it highlights the importance of
choosing property investments where there is a rental market if this issue is a
decisive factor in the investment strategy.
Validus are happy to discuss these and other matters on the telephone or in
person at our offices in Canary Wharf and Dublin, and to put you in touch with
our partner tax, legal and currency specialists.
For further information about investing with Validus, call us on
020 7517 0580, email ask@validus-invest.com or register here.
view disclaimerPlease note: As with all investment property purchases, you are advised to take proper financial and legal advice at all stages. Investment values can decrease as well as increase. The content of this website is for informational purposes only, and readers are advised to speak to qualified legal experts and financial planners before taking any action. The information, tables, projections, and estimations provided by Validus are for indication only and do not represent factual information unless otherwise stated. The information is supplied without any guarantees whatsoever.