Exchange Rate Crisis? What Exchange Rate Crisis?

by: RussellM.Stewart
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The gloom and doom of global currency exchange rates is hardly missable, with news headlines and current rates being splashed about everywhere telling us that we're in global crisis, that we're experiencing a real crunch, that the dollar is weak and the Euro is running amuck. International businesses and traders have a real battle on their hands just trying to identify what the best deal, the best rate and the best conversion rate is, and at present it seems a perpetual challenge just to stay up to date with the fluctuating currencies.

It used to be the case that we would simply pop to our local shop or town and buy the items we needed in our local currency. We'd think nothing of it, of course. However, with so many of us now buying products online, we no longer even think about the country that the company is trading in. Often we see that the prices are listed in dollars, or Euros, and think very little of it. Some people change the currency to their own local one, but in fact if you do a quick, independent currency exchange rate check, you'll often find that buying products in one currency will be cheaper than buying it in another, possibly your own. Since some companies online have their converted prices fixed for a few days at a time, a significant change in rate can make a big difference.

Buying property, particularly overseas, can be a very great challenge at the best of times, but when you have to juggle the difficulties of getting your head round the exchange rates as well, it becomes a whole different ball game. A deal or price that seems good one day, and allows you to balance the books perfectly well, could look set to fall through just a few weeks further on as a direct result of the exchange rate. Remember, an exchange rate change of just a few pence to the Euro, or vice versa, could end up being the equivalent difference of several thousand pounds in the net price of the property you're after. Moving quickly isn't always possible when investing abroad, and so problems like these can be a real headache.

However, every cloud has a silver lining as they say, and in this case, there are a few companies that are still able to offer consumers deals which fly in the face of such bad news. Imagine being able to find a company that can promise to lock in the exchange rate that we had three months ago? Incredibly, I have come across just such a company, and I'm sure there are others out there too. At the moment, using my favourite online currency convertor, the Euro is rated at 1.26 to the pound sterling. Yet, I have found a company offering investors the chance to buy Spanish property at a rate of 1.40 to the pound sterling! Do they even know what's happening in the world out there? Do they care?

So what difference does this exchange rate really make? It may seem like a few pence, but let's see how this would really affect you. Let's imagine you're looking at buying a nice 200,000 property over in Spain. Taking advantage of an 11% difference in rates would mean you could potentially be making a saving of over 22,000! That's certainly not a saving to shrug off!

Obviously when purchasing property overseas it is important to bear in mind the currency exchange rate, and it is always recommended that once you start to look seriously at the prospect of purchasing property abroad you agree an exchange rate with all parties and have this included in the written terms so that you don't fall foul of any unpleasant shocks that hit the financial world later down the path. A major change in an exchange rate can result in costing you many thousands of pounds extra, so this is sound advice. Further sound advice would be to take advantage of a company who is hopelessly optimistic enough to offer an exchange rate that refuses to move on from the sunny times at the beginning of the year, and is still offering a rate that is considerably higher than anything offered by the banks. Such an opportunity makes moving abroad more like going on holiday!

Investing in property overseas shouldn't be about gambling, but necessarily whenever purchasing property, you have to be aware that prices fluctuate, rates vary, and you could find that, whilst long term you're bound to make a tidy profit, the short term is usually unpredictable. If you're lucky enough to find a company like the one I have come across that's offering an exchange rate drastically below that offered by banks or other financial institutions, then you immediately remove a large chunk of that risk - over 11% of that risk in this particular case. By saving yourself tens of thousands of Euros off the price, you could immediately sell the property on at the normal going rate of exchange and make yourself a quick 11% profit! Clearly that would be unlikely to attract many people, but what is attractive is the chance to create a safety net to help you get through the short term, and enjoy your long term investment.

If you're considering investing in property abroad for the first time, you may already have some idea of the differences between buying at home, and buying in a different country. With various regulations and requirements that take a good deal of getting used to, you may find that the budget you had in mind will be stretched a little further than you anticipated once the cost of lawyers, solicitors and other paperwork comes into play. By fixing an exchange rate well below that of the normal going rate, you help to give yourself enough slack to easily absorb the extra costs that may be incurred. All in all, it's an offer well worth you taking further if you're serious about investing.

About the Author

If you are searching for some super spanish property deals then check out this website. They provide preferencial exchange rates of 140 euros to the pound on selected properties on the Costa Blanca and Costa More thanlmeria. More than 15% saving on current rates on some superb Spanish properties  

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