A major fact about owning rental properties is that there’s no need to stick to a single local market with today’s technology. In other instances, 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 convincing reasons to do so, from diversifying your investment portfolio to planning for retirement. However, buying property internationally can also be a complicated process. For that reason, you need to know as much as you can about your desired location and financing options before buying property abroad.
Why Go International
Investors choose to obtain a rental property in other countries for many factors. For some, it offers a way to diversify a real estate investment portfolio and achieve higher returns. Some investors try to find locations that tend to attract tourists but have a low cost of living. These spots can make for higher rental income in some cases. One more valid reason to invest in international real estate is to prepare for retirement. While several areas 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
There are several things you need to understand about your chosen location and property before you invest. These include:
- Laws: Every country has particular laws that govern real estate transactions. Not knowing the applicable laws might lead to problems, from property rights disputes to delays in the purchase process. Work hard to understand 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 it is done in the U.S.
- Currency: Swings in currency are quite common and difficult to predict. When making a huge 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, mainly 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
One more crucial 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. Most investors pay cash or use funds from a retirement account to purchase a property outright.
This is probably the best 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 vigilant for scams; many would-be scammers see foreign investors as easy targets.
If you’re a remote investor looking into purchasing rental property in Kimberly and the surrounding areas, Real Property Management Magic Valley can assist! Our Kimberly 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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