A significant part of owning rental properties is that there’s no need to stick to a single local market with today’s technology. In other situations, 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 valid reasons to do so, from diversifying your investment portfolio to planning for retirement. On the other side, obtaining property internationally might be a complicated process. So it is vital to know as much as you can about your desired location and financing options before buying property abroad.
Why Go International
For numerous reasons, investors choose to purchase a rental property in other countries. For some, it offers a way to diversify a real estate investment portfolio and achieve higher returns. Some investors pursue locations that tend to attract tourists but have a low cost of living. These areas can make for higher rental income in some situations. Another primary reason to invest in international real estate is to prepare for retirement. While many locations in the U.S. can strain the average retirement income, there are many places around the world where costs are lower, and retirement funds can last much longer.
Things to Know Before Buying
Surely, there are a lot of things to consider about your desired location and property before you invest. These include:
- Laws: Every country has unique laws that govern real estate transactions. Unawareness regarding the applicable laws can bring about problems, from property rights disputes to delays in the purchase process. Be sure you are aware of the laws that apply in your case!
- Citizenship and Ownership Rights: In other countries, property can only be owned by citizens. Some countries may also have different ideas about what constitutes ownership, and establishing or passing on that ownership may vary from how things operate in the U.S.
- Currency: Changes in currency are quite typical and complex to predict. When performing 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, particularly 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.
Another vital 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 probably the simplest route to take, though the most expensive. In other instances, 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 careful with scams; most would-be scammers see foreign investors as easy targets.
If you’re a remote investor looking into purchasing rental property in Webster Groves and the surrounding areas, Real Property Management Specialist can help! Our Webster Groves 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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