Today, the overseas real estate investment market is quite lucrative.
Still, it has its fair share of challenges and scammers. An investor looking into real estate abroad must consider a lot of factors: from assessing suitable markets to understanding a foreign country’s legal aspects.
This comprehensive guide breaks downs all the information needed to maximize your overseas property investment.
Important Considerations for International Property Investors
As you strive to become an international property investor, here are nine tips you should keep in mind.
1. Research the Local Real Estate Market and Legal Framework
When making an overseas real estate investment, the global trends are not what you want to rely on. You need to do your homework and assess the real estate market of your desired locale. Consult several reputable sources and compare the information obtained.
Furthermore, check the amenities, local infrastructure, and security measures available that would influence the property’s value. It is advisable you visit the location in person as you conduct the local real estate market research.
As a foreigner, you should also be aware of the legalities surrounding overseas property investment in the country you are interested in. You don’t want to find yourself on the wrong side of the law.
2. Have a Local Partner in the Country You’re Considering
A local partner can be a trusted property developer or a reputable real estate agent. They will be your source of all the necessary information. This includes the local real estate market, laws, restrictions, cultural characteristics, etc.
A legitimate local partner will boost your probability of a safe and successful overseas real estate investment.
3. Use a Dual-Lingual and Dual-Qualified Solicitor
A dual-qualified lawyer will save you from hiring two solicitors to navigate the legislative processes in both countries. A bilingual lawyer guarantees accurate and effective communication during the purchase process. Having a lawyer who is both dual-qualified and bilingual will ensure your interests as an investor are well-represented.
4. Use Money Transfer Companies
You would probably consider using your bank to make international funds transfers for overseas property investment. While banks offer safety and security for transferring large funds, the cost implications can be very heavy. The high currency exchange margins and transaction fees, especially for large sums of money, quickly become an expensive affair.
Look into using a money transfer company instead. The safety of the process is assured, the security of your money is guaranteed, and the transaction costs for your overseas property investment will be significantly lower.
5. Consider Taking a Mortgage Locally Where the Asset Is Located
Securing a local mortgage where your overseas property investment is located is more beneficial than taking it out in your home country. Beyond accessing finances, you will be privy to the expertise of the local mortgage company. This could make your investment experience easier and more favorable.
6. Don’t Get Sucked Into Investments Aimed at Foreigners
If an overseas real estate investment is marketed specifically for foreign investors only, that is a red flag already. Such investment projects tend to be mostly scams or ploys to take advantage of your finances by overpricing the properties. It is important to do due diligence on any overseas real estate investment you want to make.
7. Translate the Documents
Having all the property documents accurately translated from the local language to English may seem like a minor task — but it is essential. Accurate translation by a professional translator will ensure all information represented is valid to prevent any potential legal issues.
8. Be Aware of the Macroeconomic Conditions
The macroeconomic conditions of any country play a big role in determining the country’s future. Financial stability or instability, for example, significantly influences the value of real estate and trends in rental demand. Therefore, you must understand the macroeconomic conditions of any country before making an overseas real estate investment.
9. Focus on a Single, Well-Planned Investment
When it comes to overseas property investments, it’s always advisable to dip your toes in the waters first before jumping all in. Therefore, instead of picking up multiple property investments, try a single project first. Focusing on one well-planned investment saves you from making multiple mistakes.
Variety of Property Types and Investment Strategies
Cast your net wide when it comes to the type of property to consider purchasing overseas. A good place to paint the picture of the property types available is going through a reputable real estate company.
For example, suppose you are looking for prime real estate in Vienna. In that case, you need a trusted vendor with numerous property options — from flats and houses to commercial and rentals within the lucrative city center. Such a platform should provide many property options based on your search criteria.
Besides looking at a variety of overseas real estate to invest in, explore different strategies as well. You could invest in overseas property to rent out for a permanent income stream or purchase to upscale and resell. Your overseas property could also just be your second home, which is still a great investment.
What to Consider When Buying a Property Overseas?
There are three major factors that you need to consider before settling on an overseas location and property.
- Popularity of the location. When determining the popularity of the location where you want to purchase an overseas real estate property, there are two key questions to ask:
- Is the location and property you want to invest in a favorite for holidaymakers?
- Can you see yourself visiting the location year after year and still enjoying it?
- Accessibility of the property. For any successful overseas real estate investment, accessibility is key. The two important questions to answer are:
- Is the property located close to the airport served by a number of airlines?
- How long does it take you to fly to and from the potential overseas property investment?
- Amenities available. Availability and accessibility to community amenities increase the value of real estate investments. Thus, your overseas real estate investment should be near restaurants, entertainment facilities, shops, etc.
If you take all of the above into consideration, you’ll be sure to complete the process of foreign real estate investment easily and without any trouble.
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