Are you interested in investing in real estate?
Often, most people investing in real estate tend to stick to local properties in their area. However, if you’re a little more daring, you could look a little further afield – sometimes even outside of your own country!
Be forewarned though.
Buying abroad does have its complications, but in some cases can be far more affordable and far more profitable in the long run. Whether you’re looking to go property flipping in a foreign country, become an overseas landlord or buy a property for yourself to live in, here are steps you’ll need to take first.
Where to search?
Buying abroad no longer requires flying over and visiting an estate agent. The internet has made it possible to look for properties all across the world. There are now realtors that operate entirely online offering an array of apartments and houses across the globe.
Online auctions houses are another place to look. These are generally great places for finding cheap properties in need of doing up although it pays to have a lot of money behind you and a good knowledge of real estate behind you
Social media is also a great place to find independent sellers. Search on Twitter for ‘property for sale’ in an area of the world and see what comes up.
Make sure that the seller provides photos and full specs. Some realtors are now providing VR tours, as well as tours by Skype and other video communication methods. In all case, going and visiting the property first in person is recommended before buying. You will have to fork money out on travel, but it’s the safest and most secure option for protecting yourself against scams, allowing you to experience the whole picture for yourself.
Knowing the neighbourhood
The biggest danger with buying abroad is not knowing the neighbourhood. Many overseas buyers will look into a place that they’ve already visited in the past. Taking a look in person first is always advised even if you’re not planning on moving into the property yourself. You want to make sure that it’s a pleasant neighbourhood that people will want to buy into – knocking on a few doors could help you get an idea of what the locals think.
If you’re buying somewhere to rent to holidaymakers as a holiday home, make sure to check out the competition in the area.
Sorting out the legalities
When buying any property, a solicitor is worth having for sorting out the paperwork. This is even more the case when buying abroad as a new country comes with a whole new set of laws. Find a solicitor that understands the property laws of that country to help you out.
Lost in translation
Buying abroad may also require dealing with another language. It’s worth hiring a translator to make copies of all contracts and paperwork so that you know what you’re getting yourself into. If you’re going through a foreign estate agent, having a translator with you may also be handy.
Understanding the exchange rates
Buying abroad may mean dealing in two countries. The deposit cost, mortgage payments and rent payments may all need to be converted. Shop around for ETF services that will give you the best exchange fee whilst not limiting how much you can and can’t transfer. Going online, you may be able to find a better service than your own bank.
If you’re buying a home abroad to renovate, it’s unlikely you’ll want to do the renovations yourself unless you’re prepared to jet back and forth to do DIY. Hiring local handymen will work out much cheaper. Different countries will have different laws on building requirements and planning permission so remember this before you start remodelling. Some countries such as Singapore may require a registered plumber to do any plumbing work, whilst various chemicals may be banned in certain countries that could be used in paints and building materials.
Remember that popular renovations in your home country may be different to that of a foreign country. A property in a sunny country may not need insulation, although air conditioning may need to be kept fully working.
Becoming an overseas landlord
Allowing tenants to stay in your property abroad will require going through a landlord service that can provide the local support you need. Such a service can ensure that there are always tenants in the property, that rent is always paid and that repairs are seen to promptly.
You’ll also need to take out a special international buy-to-let mortgage. Various banks and mortgage companies provide these and you can use a mortgage broker to find the best deal.
Be aware that your rent could be counted as taxable income if it exceeds a certain amount. In some countries this may result in double taxation, both from your home country and your foreign property’s country. Having an accountant or a financial advisor to help you with this is beneficial. There are specialised accountants and financial advisors that can deal with foreign finance law.
Moving in yourself
Buying a property abroad could be less of an investment and more of a personal purchase. It could be a holiday home for you to use, or a permanent residence.
Permanently moving abroad is a big decision and can result in all kinds of complex financial planning. If you’ve got no financial ties to your home country such as businesses or other properties, it can be much easier to make the move. You will have to save up a fair bit for a moving company. If you’re crossing a border over land, you may be able to hire a lorry or van service and move your belonging by road. If not, shipping or jetting over your belongings may be the only option. In all cases, this can cost thousands and should be budgeted for.
If you’re moving abroad for a fixed term of a couple months or years and plan to return to your home country, you may be able save money by not bringing over all your belonging. Selling up your property in your home country and then moving most of the belongings into self storage could work out cheaper. Only bring with you the belongings that you need – it may be cheaper to buy many items abroad such as ironing boards, couches and mattresses.
Taking the choice to move abroad will also involve changing a lot of personal details. You’ll have to decide whether you want to apply for citizenship, which will affect how you’re taxed as well as other ownership laws surrounding your property. A working visa may be more appropriate for periods of less than a year. Decide whether you want to sign up with local healthcare, open a foreign bank account and drive in that country too.
Solicitors in immigrant law can often help with all the paperwork queries and advise you on what best to do depending on how long you plan to stay. Some countries such as Australia can have very strict immigration laws, so always look into these so that you’re fully prepared for your move abroad.