For people who want to start investing in buying overseas real estate property, asking the right questions and searching for the right answers is a must. The potential benefits of taking this path are boundless, but the risks are also not to be taken lightly.
There’s the risk of fraud commonly associated with overseas real estate investments. Getting your assets seized by the foreign government, which has jurisdiction over the property you bought is also a possibility. What if the government authorities plan to expropriate your property to build a public school on it? That’s indeed very problematic on your part.
To ensure that you won’t encounter such problems, you must follow these tips if you want to purchase a real estate property overseas.
Find the best countries to buy properties
When looking for countries where you can purchase real estate properties for investment, you need to know the risk factors. See if the country is in economic or political turmoil, whether there are real estate pricing issues, high valuations, disadvantageous property taxes, exorbitant interest rates, etc.
You should also determine the benefits that you can get from investing in real estate in foreign countries. Make sure that there’s high capital appreciation or rental yields. Consider if paying cash for land or a house is possible without taking out a mortgage. Or whether the country has an excellent banking system that enables you to get a mortgage at affordable rates.
Morocco, the Philippines, Turkey, Canada, Indonesia, United Arab Emirates, Australia are the best countries to invest in overseas real estate.
Build your network
Besides finding the best overseas real estate property, you also need to find the right folks that can help you. Consider hiring a real estate agent, accountant, lawyer, and expats who know the real estate market in that country.
Attend seminars and conferences where you can meet people who have the expertise and experience in the path you want to tread. As you discuss your plan to invest in real estate properties overseas, these people may offer assistance or form a partnership with you on your journey.
When you’re looking for real estate in a country, work with not only one but several real estate agents. Look for agents that can be trusted and have excellent track records. Real estate agents can introduce you to trustworthy property managers, accountants, and attorneys.
After you have built a network of reputable and trustworthy people, your dream for success can be more achievable. Just don’t be too complacent that all will go smoothly once you have put together your network. You still have to prepare for all sorts of contingencies that may occur along the way.
Make sure to take your documentation to the next level when you’re planning to invest overseas. Keep every proof of payment and document related to the business. It’s also crucial to take note of every person you deal with.
When entering into a real estate project overseas, see to it that you create a formal contract with the contractor. In this way, you can ensure that every detail of the project will be taken care of by the contractor. Having a formal agreement also prompts the contractor to finish the project according to the deadline.
Keeping a record of everything is also crucial when the tax season comes or when you plan to sell the property. For a newbie in the field of overseas real estate investing, documentation should be one of your priorities.
Consider your tax liability as an investor
Investing in real estate overseas can mean having to deal with different tax regulations. That’s why it’s crucial to work with an accountant for this matter to ensure that you won’t have any issues with your taxes.
Keep in mind that governments impose taxes on realized capital gains aside from investment incomes. With the assistance of your accountant, you can determine the tax rates on your income and gains, tax benefits, and your total tax liabilities. Always follow the tax rules of the country where you want to invest in real estate.
Overcome the language barrier
English is the standard language for business in many countries. However, many countries require formalities in their national language and not everyone you deal with will speak English.
You should hire an interpreter to assist you until you can learn the language yourself. It’s also great to hire local people that you can trust to represent you. In this way, you can minimize the language barrier.
If you’re planning to tread this path, keep the tips mentioned above in mind. Also, learn about the pros and cons of overseas real estate investing before you take this business endeavor.