An essential fact about owning rental properties is that there’s no need to stick to a single local market with today’s technology. At times, 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 consider buying rental property in another country. There are many valid justifications to do so, from diversifying your investment portfolio to planning for retirement. However, purchasing property internationally can also be a complicated process. Hence, it is recommended to know as much as you can about your desired location and financing options before buying property abroad.
Why Go International
Investors decide to purchase a rental property in other countries for many purposes. For some, it offers a way to diversify a real estate investment portfolio and achieve higher returns. Some investors chase down locations that tend to attract tourists but have a low cost of living. These places can make for higher rental income in some situations. One more top motivation to invest in international real estate is to prepare for retirement. While many spots in the U.S. can strain the average retirement income, there are numerous areas around the world where costs are lower, and retirement funds can last much longer.
Things to Know Before Buying
Of course, there are many things you want to be familiar with regarding your desired location and property before you invest. These include:
- Laws: Every country has different laws that govern real estate transactions. Not understanding the applicable laws can prompt issues, from property rights disputes to delays in the purchase process. Be certain to understand the laws that apply in your case!
- Citizenship and Ownership Rights: In certain countries, property can only be owned by citizens. Different countries may also have unique ideas about what constitutes ownership, and establishing or passing on that ownership may differ from how things work in the U.S.
- Currency: Fluctuations in currency are quite normal and challenging to predict. When finishing any huge financial transaction, you should be prepared for currency exchanges to be rather fluid and, in some cases, may experience losses as a result.
- Stability: Living anywhere outside of your country of residence comes with certain political risks, primarily 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 key consideration of buying rental property internationally is financing. Few U.S. lenders will even consider loaning money for property outside of the country, which leaves investors with a range of alternatives. Numerous investors pay cash or use funds from a retirement account to purchase a property outright.
This is probably the fastest route to take, though the most expensive. At times, 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 aware of scams; many would-be scammers view foreign investors as easy targets.
If you’re a remote investor looking into purchasing rental property in Chubbuck and the surrounding areas, Real Property Management Pocatello can aid! Our Chubbuck 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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