A notable aspect of owning rental properties is that there’s no need to stick to a single local market with today’s technology. In other circumstances, 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 consider buying rental property in another country. There are several great reasons to do so, from diversifying your investment portfolio to planning for retirement. But getting property internationally can also be a hard process. This is why you need to know as much as you can about your desired location and financing options before buying property abroad.
Why Go International
Investors choose to acquire a rental property in other countries for numerous reasons. For some, it offers a way to diversify a real estate investment portfolio and achieve higher returns. A few investors choose locations that tend to attract tourists but have a low cost of living. These areas can make for higher rental income on certain occasions. One more primary reason to invest in international real estate is to prepare for retirement. While many spots in the U.S. can strain the average retirement income, there are multiple areas around the world where costs are lower, and retirement funds can last much longer.
Things to Know Before Buying
Yes, you should consider many things about your desired location and property before investing. These include:
- Laws: Every country has different laws that govern real estate transactions. Not understanding the applicable laws can lead to problems, from property rights disputes to delays in the purchase process. Be sure to learn the laws that apply in your case!
- Citizenship and Ownership Rights: In some countries, the property can only be owned by citizens. Different countries may also have unique ideas about what constitutes ownership, and establishing or passing on that ownership may differ from how things operate in the U.S.
- Currency: Ups and downs of currency are very common and tough to predict. When doing any big financial transaction, you need to be prepared for currency exchanges to be rather fluid and, in some cases, may experience losses as a result.
- Stability: Staying anywhere outside of your country of residence comes with certain political risks, specifically 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.
Financing
Another important consideration in buying rental property internationally is financing. Few U.S. lenders will even consider loaning money for property outside of the country, which leaves investors with a limited range of alternatives. Many investors pay cash or use funds from a retirement account to purchase a property outright.
This is probably the easiest route to take, though the most expensive. In some cases, 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 on the lookout for scams; many would-be scammers view foreign investors as easy targets.
If you’re a remote investor looking into purchasing rental property in Bel Aire and the surrounding areas, Real Property Management First Choice can help! Our Bel Aire 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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