Some of the most popular places to buy international real estate include areas that are beachfront and perhaps less developed, with prices that are currently lower than some of the more well-known world hotspots. For example, maybe you want to send money to Ecuador to buy property, or to Belize, Portugal, Panama, or the Dominican Republic.
If so, what should you know ahead of time? How can you prepare to buy foreign property, particularly if you’re just a normal investor without the resources of a multimillionaire?
Why do people go through the trouble of purchasing a foreign property? Yes, there’s the fact that you have the chance to own a getaway in a beautiful location, but there’s more to it than that.
First, you’re likely to get a much better deal than you would stateside. If you’re buying a beachfront home in Ecuador, as an example, the price is going to be much lower than it would be if you were trying to buy a beachfront home in Miami.
It also gives you the opportunity to diversify your investment portfolio, and you can earn income from renting it out. Ultimately it may be where you end up retiring and enjoying a lower cost of living than you would in the U.S.
Investors also appreciate the security that comes with having a hard asset and investing in foreign real estate is advantageous from a tax perspective.
Get Help From a Professional
Despite the many advantages, buying foreign property can be difficult to navigate on your own. You want someone working with you who understands the laws of both the U.S. and the country where you’re buying. You want them to know the language, and serve as your advocate throughout the process.
There is a very real risk of being scammed if you don’t work with a professional during the process.
You should also make sure you get all documents professionally translated by a human before signing anything.
Regardless of whether or not you have a specific destination in mind to make a purchase, it’s important to be strategic before making a final decision on anything. You’ll want to look at long-term real estate trends in addition to what’s currently happening in the region.
You’ll want to consider the local elements that currently affect prices, and also think about the forecasts for the real estate market.
Think About Resale
Finally, unless you’re absolutely going to retire in the property you’re buying, you are likely to want to sell it at some point. That’s what most real estate investors do. If so, you need to think about not just what you personally like when you’re making a purchase, but what’s going to have the best resale value.
For example, when it comes to resort and retirement communities, the options that tend to be most sellable are two-bedroom condos. This is good from a rental standpoint as well. Think about how big the market will be for both renters and future buyers before choosing a property.