Many people look to being overseas property investors as a way of diversifying their real estate portfolio. And why not? Looking abroad means tapping into hundreds of new markets and much potential. However, this is not the time to be diving straight in at the deep end. Careful research and homework are needed to ensure any future investment property pays off and doesn’t become a money pit, especially if you plan to rent it.
Any good estate-agent or real estate broker is on hand to help choose a comprehensive real estate investment. Still, it pays to be aware of side issues like rental income, capital gains, rents, stamp-duty, cash-flow, interest rates and more. So, let’s get started on what you need to know about investing abroad.
To buy a property abroad, you might think choosing a country is the first step. However, getting finances in order is a priority. Be aware that exchange-rates will be a consistent factor. For example, now, the Turkish lira is exceptionally high, but the government has plans to lower it over the next five years, so foreigners won’t get so much for their money as they do now. Just think, this is much about investing in your financial future as it is property. To be a borrower from a mortgage lender, shopping around for low-interest rates is essential. Other aspects to keep in mind alongside mortgage payments are upkeep and maintenance costs, gains tax, and additional purchasing costs. If you struggle, employ a financial advisor, but now it is time to budget, to invest wisely, and avoid financial hardship.
One mistake, first-time investors, often make is to look at the property prices only. They choose the cheapest country to buy in without checking out the purchasing laws for the real estate market, the additional costs, and the upkeep and maintenance. They also don’t consider liquidity, should they need to sell their brick-and-mortar foreign-investment quickly for hard cash. Anyone investing in real estate abroad knows their investment strategy by arming themselves with knowledge about the country’s buying process, lifestyle, GDP, and value estimations.
It is not enough to know about buying a home in another country. Go local because like everywhere, certain areas and sectors do better in terms of capital appreciation, property-price, and infrastructure. For example, consider the real estate market in Spain. Many foreigners buy on the southern and western coasts, but rarely venture up north and for two reasons.
One is the weather climate and second, is that the Costas are more geared up for foreign holidaymakers and ex-pats. In Turkey, owning a villa in the small resort of Didim ensures purchasing and living costs are half that of Istanbul. Rather than just searching which country is best, real estate investors should research whereabouts in that country offers the most potential. A key factor is to look at where most foreigners buy and the long-term plans of the local council.
Sometimes, the odd real estate investor like to rent to tenants to diversify their passive income stream. If this is something, you want to know, research the market of your chosen destination. Factors to consider is how much competition there is, the average prices of rent, and what yields to expect. Some areas present higher yields than others because of more demand. Rental properties also need to be geared up for precisely that purpose. For example, for holiday renters, don’t buy in a suburb. Instead buy in the town's heart which is close to beaches, shops, supermarkets, transport links and banks. Also check out the rules re taxation, contracts to rent, and leasing laws.
Owning real estate overseas can be a hindrance for non-residents. Consider finding a keyholder or management company who performs monthly checks and take on the bill payments, and likewise, with rented properties. Tenants will want a point of contact. Don’t forget to factor this monthly fee into financial budgets.
Any buyers who plan to move abroad should also consider residency rules. Most require financial independence and adequate health care insurance. Besides, look at citizenship by investment schemes for qualification rules. At present, Turkey’s system only requires a minimum purchase level of $250,000.
To get an idea of investment opportunities, browse our portfolio of villas and apartments for sale around the world. Including commercial real estate, buy to let, townhouse, condo, first home, and holiday home and residential property for sale, each listing includes price, location details and home features.
Just use the enquiry form to find out more via email or a phone call. Alternatively, to talk to an agent about investing, call us today. As a real estate agent whose helped hundreds of buyers buy a home abroad, we are on hand to give non, biased advice about lucrative markets, portfolio diversification, capital growth, Investment properties, renting and more.
Last, when buying property abroad, think of it as a long-term investment. This is not the time to be flipping houses or looking at a renovation property, in a market that you are entirely unaware of. When renting due diligence is key to a positive cash flow. Once you’ve successfully bought your first property, and understand the housing market, look at expanding your portfolio. For more advice on profitable property markets abroad, also see our blogs about buying real estate abroad.
About Us: We are Spot Blue, an agent who specialises in real estate investments overseas. We don’t just sell homes; we also help property owners to ensure their purchase in another country goes smoothly by equipping them with local knowledge to make a wise purchase. Contact us today to speak with an agent or follow us on Facebook to stay up to date with overseas property investor news.