A significant fact about owning rental properties is that there’s no need to stick to a single local market with today’s technology. In other instances, buying outside of the town or city where you live can be far more profitable and offer you new opportunities and perks. You may even want to evaluate buying rental property in another country. There are multiple good reasons to do so, from diversifying your investment portfolio to planning for retirement. However, getting property internationally can also be a complex process. This is why it is necessary to know as much as you can about your desired location and financing options before buying property abroad.
Why Go International
Investors decide to acquire a rental property in other countries for a number of factors. For some, it offers a way to diversify a real estate investment portfolio and achieve higher returns. Some investors search for locations that tend to attract tourists but have a low cost of living. These places can make for higher rental income in some cases. Another significant reason to invest in international real estate is to prepare for retirement. While numerous cities in the U.S. can strain the average retirement income, there are several places around the world where costs are lower, and retirement funds can last much longer.
Things to Know Before Buying
Indeed, there are several factors to keep in mind about your desired location and property before you invest. These include:
- Laws: Every country has different laws that govern real estate transactions. Not learning the applicable laws can lead to complications, from property rights disputes to delays in the purchase process. Don’t forget to research the laws that apply in your case!
- Citizenship and Ownership Rights: In some countries, property can only be owned by citizens. Some countries may also have specific ideas about what constitutes ownership, and establishing or passing on that ownership may differ from how things function in the U.S.
- Currency: Changes in currency are very common and complex to predict. When completing any big financial transaction, you have to be prepared for currency exchanges to be rather fluid and, in some cases, may experience losses as a result.
- Stability: Dwelling anywhere outside of your country of residence comes with certain political risks, especially if the country’s government in which your property is located isn’t stable. You may risk losing your property, income, or related assets if worse comes to worst.
Another vital consideration in buying rental property internationally is financing. Few U.S. lenders will even consider loaning cash for property outside of the country, which leaves investors with a range of alternatives. Numerous investors pay cash or use funds from a retirement account to purchase a property outright.
This is probably the quickest route to take, though the most expensive. In some scenarios, you may be able to qualify for Golden Visa or other country-sponsored programs or work with lenders in the country where the property is located. Just be mindful of scams; many would-be scammers see foreign investors as easy targets.
If you’re a remote investor looking into purchasing rental property in Bertram and the surrounding areas, Real Property Management Highland can help! Our Bertram property managers work with investors of all sizes to help assess properties, locate off-market deals, and much more. Contact us to learn about your options.
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