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 other circumstances, 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 explore buying rental property in another country. There are several compelling reasons to do so, from diversifying your investment portfolio to planning for retirement. However, purchasing property internationally can also be a difficult process. As a result, it’s necessary to know as much as you can about your desired location and financing options before buying property abroad.
Why Go International
Investors prefer to purchase a rental property in other countries for several reasons. For some, it offers a way to diversify a real estate investment portfolio and achieve higher returns. Some investors seek locations that tend to attract tourists but have a low cost of living. These locations can make for higher rental income in some circumstances. One more important reason to invest in international real estate is to prepare for retirement. While several regions in the U.S. can strain the average retirement income, there are multiple places around the world where costs are lower, and retirement funds can last much longer.
Things to Know Before Buying
There are numerous factors you need to understand about your desired location and property before you invest. These include:
- Laws: Every country has different laws that govern real estate transactions. Not knowing the applicable laws might cause issues, from property rights disputes to delays in the purchase process. Make sure you understand the laws that apply in your case!
- Citizenship and Ownership Rights: In other countries, property can only be owned by citizens. Other countries may also have specific ideas about what constitutes ownership, and establishing or passing on that ownership may vary from how it is done in the U.S.
- Currency: Fluctuations in currency are quite common and difficult to predict. When making a significant 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, 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.
One more significant consideration of buying rental property internationally is financing. Few U.S. lenders will even consider loaning cash 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 probably the quickest route to take, though the most expensive. In other circumstances, 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; several would-be scammers see foreign investors as easy targets.
If you’re a remote investor looking into purchasing rental property in Brooklyn and the surrounding areas, Real Property Management New York Gold can assist! Our Brooklyn 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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