An important reality of owning rental properties is that there’s no need to stick to a single local market with today’s technology. In some scenarios, 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 several great reasons to do so, from diversifying your investment portfolio to planning for retirement. On the other hand, purchasing property internationally can also be a complicated process. Therefore, it is advisable to know as much as you can about your desired location and financing options before buying property abroad.
Why Go International
Investors prefer to get a rental property in other countries for numerous factors. For some, it offers a way to diversify a real estate investment portfolio and achieve higher returns. A few investors look for 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. Although many areas in the U.S. can strain the average retirement income, there are numerous locations around the world where costs are lower, and retirement funds can last much longer.
Things to Know Before Buying
Of course, there are lots of things you need to know about your ideal location and property before you invest. These include:
- Laws: Every country has different laws that govern real estate transactions. Ignorance regarding the applicable laws might result in problems, from property rights disputes to delays in the purchase process. It is important to know the laws that apply in your case!
- Citizenship and Ownership Rights: In some countries, the property can only be owned by citizens. Some 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 pretty regular and hard to predict. When performing any large financial transaction, you must 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 significant consideration of buying rental property internationally is financing. Few U.S. lenders will even attempt loaning funds for property outside of the country, which leaves investors with a range of alternatives. Several investors pay cash or use funds from a retirement account to purchase a property outright.
This is certainly the shortest route to take, though the most expensive. In other cases, 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 of scams; most would-be scammers perceive foreign investors as easy targets.
If you’re a remote investor looking into purchasing rental property in Chesapeake and the surrounding areas, Real Property Management Hampton Roads can assist! Our Chesapeake 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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