An essential part of owning rental properties is that there’s no need to stick to a single local market with today’s technology. On other occasions, 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 valid explanations to do so, from diversifying your investment portfolio to planning for retirement. On the flip side, purchasing property internationally can also be a tricky process. In that case, you need to know as much as you can about your desired location and financing options before buying property abroad.
Why Go International
Investors want to acquire 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. Several investors prefer locations that tend to attract tourists but have a low cost of living. These zones can make for higher rental income in certain circumstances. Another major incentive to invest in international real estate is to prepare for retirement. Although numerous areas in the U.S. can stretch the average retirement income, there are many places around the world where costs are lower, and retirement funds can last much longer.
Things to Know Before Buying
Sure thing, there are numerous things to consider about your ideal location and property before you invest. These include:
- Laws: Every country has various laws that govern real estate transactions. Not learning the applicable laws can lead to undesirable effects, from property rights disputes to delays in the purchase process. Don’t forget to review 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 separate ideas about what constitutes ownership, and establishing or passing on that ownership may vary from how things operate in the U.S.
- Currency: Fluctuations in currency are relatively common and complex to predict. When doing 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: Staying anywhere outside of your country of residence comes with certain political risks, especially 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 important consideration in buying rental property internationally is financing. Few U.S. lenders will attempt 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.
Probably, this is the fastest route to take, though the most expensive. In certain 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 cautious of scams; some would-be scammers believe foreign investors are easy targets.
If you’re a remote investor looking into purchasing rental property in Alameda and the surrounding areas, Real Property Management Pacific can help! Our Alameda 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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