A significant feature of owning rental properties is that there’s no need to stick to a single local market with today’s technology. In certain cases, 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 aim to explore buying rental property in another country. There are several sufficient grounds to do so, from diversifying your investment portfolio to planning for retirement. However, obtaining property internationally can also be a hard process. Because of that, it’s imperative to know as much as you can about your desired location and financing options before buying property abroad.
Why Go International
Investors prefer to acquire a rental property in other countries for many reasons. For some, it offers a way to diversify a real estate investment portfolio and achieve higher returns. Some investors opt for locations that tend to attract tourists but have a low cost of living. These areas can make for higher rental income in some cases. Another primary motive to invest in international real estate is to prepare for retirement. Although many locations in the U.S. can strain the average retirement income, there are numerous countries around the world where costs are lower, and retirement funds can last much longer.
Things to Know Before Buying
Undeniably, there are plenty of factors you need to know about your chosen location and property before you invest. These include:
- Laws: Every country has specific laws that govern real estate transactions. Unawareness of the applicable laws might lead to complications, from property rights disputes to delays in the purchase process. Don’t forget to study the laws that apply in your case!
- Citizenship and Ownership Rights: In some countries, property can only be owned by citizens. Different countries may also have different ideas about what constitutes ownership, and establishing or passing on that ownership may differ from how things work in the U.S.
- Currency: Currency variations are relatively common and hard to predict. When completing any large 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.
Financing
Another critical 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. Most investors pay cash or use funds from a retirement account to purchase a property outright.
This is probably the quickest route to take, though the most expensive. In certain situations, 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 on guard for scams; many would-be scammers perceive foreign investors as easy targets.
If you’re a remote investor looking into purchasing rental property in Austin and the surrounding areas, Real Property Management Advisors can assist! Our Austin 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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