There are a 1.1 million reasons why someone may want to invest in property overseas and, for that reason, we are not going to go through them all (we don’t want to keep you here until the year 3031). There is, however, a common denominator that overarches all of these reasons; diversification. It doesn’t matter if your looking to buy property overseas as an investment, as a second-home, as a retirement plan, or a what; investing in real estate abroad is all about diversification.
That doesn’t mean investing overseas is simple. It isn’t. There are things to consider because, if you don’t, you can be left up a certain creek without a paddle. That’s why we have come up with a list of rules - Golden Rules if you will - to help ensure you invest well and for the right reasons.
Your Endgame Is Essential
Before investing in anything it is vital that you know what you want to get out of that investment. This is especially true with a property. That is why it is always worth thinking about why you are buying overseas from the get go. The reason for this is it could well influence where you buy and what you buy. It is the old to let or not to let question. If you just want a property in a gorgeous location for when you retire then fine, you know your endgame. If you are looking to maximize your net worth or earn a rental income, then you will need to consider what will do this best for you. This means looking at the upkeep of an apartment over a house, the rental market now and how it has grown over the last few years and what outgoings may be attached.
Disaster Is Around The Corner
We’re talking about having a Plan B. The reason for this, well, we’re talking about a big investment, so you’ll want to have a contingency in place just in case something or everything goes belly up. The things to consider are house prices falling, interest rates climbing, rental yields dropping and dealing with tenancy issues. All of these things should be accounted for and the best way to do this is to have a plan in place that addresses each possibility.
Use All the Help You Can
The first thing you have to understand is that different countries have different rules you have to adhere by, which can make investing in a property a little tricky. Let’s say someone wants to invest in the US, where most first-time investment applications are turned down because the investor lacked an understanding of what is required. You’ll want to use EB-5 investment specialist lawyers to take the guesswork out of your application, and a local real estate agent to help you understand the local market, and a native accountant to explain the tax implications of any investment. The more knowledge you acquire, the smoother the ride.
Consider The Hidden Costs
We’ve touched on taxes, but that is only one slice of a far bigger pie. You will also need to consider the other hidden costs attached to ownership, things like maintenance costs, especially if you are looking at a property with a pool or front garden or a backyard. There may be a monthly charge if you buy into a gated community too. Are you going to buy a furnished place or are you going to furnish it yourself? What about transport too? Are you going to rely on public transport or have to hire a car each time, maybe buy a car? If you are planning on renting the property out, then will you do it through a letting agent and have you accounted for those out of season months?All of these things add up when investing overseas.