Article by Mozo
Australia’s sky high house prices are forcing buyers to look overseas to purchase properties. Why not, when you can get more bang for your buck with a ski chalet in New Zealand or a holiday home on the Spanish coast! But before you jump the gun and purchase that dream overseas holiday home or investment property there is a lot you need to consider when it comes to transferring money abroad. The quickest, cheapest and most efficient method to send money overseas is through a foreign exchange specialist. So have a thorough read of this guide as it will provide you with all the ins and outs of international money transfers for purchasing homes abroad.
You might feel a sense of security and convenience by using your bank to transfer money overseas to purchase an international property but trust us; this is NOT a good option! Banks have high overhead costs and exorbitant fees when it comes to sending money overseas. A lot of your hard earned cash can get lost at sea during the transaction! For the below reasons, Mozo advises using a foreign exchange specialist:
When it comes to money transfers for buying property overseas, you’re not dealing in small amounts of cash! Given the amount being sent abroad for that Tuscan farmhouse or Greek beach shack is significant, it’s crucial you take the time to shop around and find a foreign exchange provider that suits your transfer needs. So when you look around and compare providers here are some key features to think about.
Exchange rates: The current exchange rate is one of the most important factors to consider. A few cents difference in the rate could make a huge difference as to how much you’ll receive for your Aussie dollars. Providers will offer different rates on each currency so compare and calculate how much you will receive for your Australian dollars with a range of specialists. Remember, the higher the exchange rate, the more money you will get!
Transfer limits: Some international money transfer providers have a maximum and minimum transfer amount. The minimum limit could be as much as $1000, so you’ll have to hunt around to find one that suits the amount you need to transfer.
Transfer time: This is the speed it takes from the moment the transaction has been processed to the time the recipient receives it. Gone are the days of waiting weeks to get a transaction cleared, these days the transfer speed can range from 1 to 5 days. Make sure you don’t miss out on a holiday home or investment property because the turnaround of funds is taking too long.
Fees: You might find your funds may shrink en route to the destination of your property! Some foreign exchange providers will charge a fee for converting your money; you may also be hit with a sending and receiving fee. Try and find a provider who may waive these fees when you transfer over a certain amount.
Transfer Options: You can make your international money transfer for your overseas property online, on the phone or in person. Different providers may offer different financial benefits for each option.
Make sure you read our guide on the common mistakes made when moving cash overseas.
Once the purchase has been made…
You’ve signed the contract, transferred the deposit and now your dream holiday home or investment property is all yours! Embrace the moment but don’t forget there are still plenty of costs associated with owning a property overseas such as; mortgage repayments, maintenance fees, council rates, monthly strata fees etc. To save you money and time, we suggest setting up a recurring payment plan with a foreign exchange provider. Compare the market and save right here!
Making money transfers when buying property overseas is a fairly straightforward process. Here’s how it all works:
1. Register and set up an account with a foreign exchange provider such as OzForex, World First and CurrencyFair
2. Decide how many Aussie dollars you want to transfer or how much money need your recipient to receive
3. Confirm and make sure you are happy with the exchange rate and costs associated with the transfer
4. Provide details of the recipient including their name and bank details
5. Book the transaction and pay the agreed amount for the transfer; this is usually done by electronic transfer
6. Once the provider has received the funds, they will send the money electronically to your recipient.