A significant reality about owning rental properties is that there’s no need to stick to a single local market with today’s technology. In other scenarios, 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 think about buying rental property in another country. There are multiple significant reasons to do so, from diversifying your investment portfolio to planning for retirement. On the other hand, obtaining property internationally might be a challenging process. As a result, you need to know as much as you can about your desired location and financing options before buying property abroad.
Why Go International
Investors want to purchase a rental property in other countries for several purposes. 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 areas can make for higher rental income in some cases. Another top reason to invest in international real estate is to prepare for retirement. While many places in the U.S. can strain the average retirement income, there are numerous places around the world where costs are lower, and retirement funds can last much longer.
Things to Know Before Buying
Certainly, there are a lot of things you need to know about your desired location and property before you invest. These include:
- Laws: Every country has specific laws that govern real estate transactions. Unawareness of the applicable laws can result in complications, from property rights disputes to delays in the purchase process. Make certain you are aware of the laws that apply in your case!
- Citizenship and Ownership Rights: In some countries, property can only be owned by citizens. Other countries may also have different ideas about what constitutes ownership, and establishing or passing on that ownership may differ from how things work in the U.S.
- Currency: Swings in currency are quite typical and tricky to predict. When making a major 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: Dwelling anywhere outside of your country of residence comes with certain political risks, mainly 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 crucial consideration in buying rental property internationally is financing. Few U.S. lenders will even think about loaning capital for property outside of the country, which leaves investors with a range of alternatives. Most investors pay cash or use funds from a retirement account to purchase a property outright.
This is the most simple 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 observant of scams; most would-be scammers consider foreign investors as easy targets.
If you’re a remote investor looking into purchasing rental property in Eagle Rock and the surrounding areas, Real Property Management Vision can help! Our Eagle Rock 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.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
