An important fact about 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 want to consider buying rental property in another country. There are many justifiable reasons to do so, from diversifying your investment portfolio to planning for retirement. However, obtaining property internationally may sometimes be a difficult process. As a result, it is a good idea to know as much as you can about your desired location and financing options before buying property abroad.
Why Go International
Investors want to purchase a rental property in other countries for various reasons. For some, it offers a way to diversify a real estate investment portfolio and achieve higher returns. Some investors find some locations that tend to attract tourists but have a low cost of living. These areas can make for higher rental income in certain cases. Another strong reason to invest in international real estate is to prepare for retirement. While many places in the U.S. can strain the average retirement income, there are numerous places around the world where costs are lower, and retirement funds can last much longer.
Things to Know Before Buying
Before you buy, there are various things you should know about your preferred location and property before you invest. These include:
- Laws: Every country has specific laws that govern real estate transactions. The inability to fully comprehend the applicable laws may result in a variety of issues, from property rights disputes to delays in the purchase process. Don’t forget to research the laws that apply in your case!
- Citizenship and Ownership Rights: In other countries, property can only be owned by citizens. Some countries may also have different ideas about what constitutes ownership, and establishing or passing on that ownership may vary from how things are conducted in the U.S.
- Currency: Volatility in currency are quite common and difficult to predict. When conducting any major financial transaction, you have to be prepared for currency exchanges to be rather fluid and, in some cases, may experience losses as a result.
- Stability: Staying anywhere outside of your country of residence comes with certain political risks, mostly 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 necessary consideration in buying rental property internationally is financing. Few U.S. lenders would even consider loaning funds 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 the most basic route to take, though the most expensive. In other 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 wary of scams; many would-be scammers regard foreign investors as potential targets.
If you’re a remote investor looking into purchasing rental property in Selma and the surrounding areas, Real Property Management LoneStar can help! Our Selma 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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