International Real Estate
The term international real estate describes a relatively new phenomenon. The term encompasses real property development, sales and leasing transactions across national borders.
It is appealing idea of spending your golden years someplace warm and sunny. Perhaps you’ve found the ultimate vacation spot and you want a permanent place to park your stuff. There are lots of reasons why you might consider buying a home overseas.
Either way, buying property in a foreign country is going to be a different experience than buying a place on your home turf. Before you fall in love with that Italian villa or a Mexican hacienda, here are few things to consider.
Whatever your motivation is for buying real estate overseas, the following tips can help you to have a positive experience in doing so.
First – Set your geographic target
Your first objective is to find a country or part of the world you would like to invest in. It is a big world and it is not easy. If you’re looking to buy foreign real estate for sale, and also have some pleasurable benefits, apart from financial gain, you want to choose an area you may not mind visiting.
Spend some time researching lifestyles and characteristics of the countries or cities you think you would like to invest in. Search listings with homes for rent. Check official websites on individual countries, such as population, economic trends, tourism, and links to other reputable sites to gather information from. Ideally, you want to support your decision with knowledge. You should know that your international property purchase is a good investment.
Legal, insurance and licensing
Every country is different, and it is your responsibility to know the laws and regulations. In most cases, you’ll find some common ground when compared to the U.S. But there are always slight and in some cases, extreme differences. Different countries have varying degrees of requirements and legalese for foreigners to acquire property. But, you must be familiar with the rules, even if this means hiring a legal aid. Even if it’s just to have someone who speaks the language and can translate documents and deal with officials.
Thoroughly investigate the market before purchasing an international real estate
Although global trends in property prices do occur, the property markets of different countries can go through independent cycles of rising and then correcting at a lower level. Although property values are rising in London, that doesn’t mean they’re also rising in Italy or Spain.
You should know, some countries prevent or limit property buying by foreigners. So it’s important that you research countries where foreigners can buy land. Do this before handing over any money in order to avoid scams or disappointment. Other essential homework should include checking the currency exchange rate and stability in the country you wish to make a purchase – something you can do for free online. Also, research the best real estate markets in 2017.
Buying property overseas tax implications
Before moving into a foreign country, it’s best to consider any tax rules that might apply. It’s not uncommon to be charged taxes when you buy a home and again when you sell it. There may also be ongoing tax payments that you’ll need to make throughout the year, similar to U.S. property taxes.
The Cost of Living
Moving overseas can benefit your bottom line if you pick an area that has a low cost of living. So, if you want to buy a home in a location where necessities like food, transportation, and medical care are much more expensive than they are in your current city, moving abroad might not make sense.
As you’re searching to buy a home overseas, it’s a good idea to learn more about how the cost of living in those areas compares to what you’re currently paying. That way, you can plan ahead and budget accordingly.
How to buy a home overseas? – Use an estate agent
Buying directly from an owner can sometimes make for a great deal. But, if you’re unfamiliar with the foreign property market or struggle with the local language, buying through an estate agent can provide useful guidance and help you avoid a number of pitfalls. Professional agents typically have an obligation to see that you are properly informed about the details of the purchase. They should also make an effort to complete the deal and assure your satisfaction.
Financing – buying property abroad mortgage
One of the trickiest aspects of buying a home overseas is figuring out the financing. Not everyone is fortunate enough to be able to go buy a house with just their savings. Most people need to take out a mortgage and for you, as someone buying property overseas, the question of how to best finance your purchase will be even more complex.
If you’re planning to go to a foreign bank to get a mortgage, be prepared to shell out a big down payment and potentially pay a high-interest rate. You may even be required to purchase a separate life insurance policy so that your mortgage can be paid off in the event that something happens to you. So, if you are considering taking out a foreign currency mortgage to finance your home, be sure to get professional advice. And always keep in mind the risks of an ever changing exchange market, the movements of which even the best expert cannot fully predict.
If you don’t want to deal with financing a home purchase overseas, you could consider using cash to pay for your house. You could use a home equity line of credit as your source of cash. But then you’d be putting your primary residence on the line if you can’t make the payments.
Have your documents translated
Before signing any documents relating to a potential purchase, make sure you have them professionally translated. It’s essential you that you understand everything you’re signing your name against, in words you clearly understand.
Hire a legal representative
Although international real estate deals in your country of residence generally do not require the services of a lawyer, having an independent professional attorney representing your interests and watching out for potential legal problems can be invaluable when buying overseas property.
Owning property in foreign lands sounds very exotic and intriguing. But like all investments or purchases, you should be fully informed and aware of your surroundings. You need to be confident in your knowledge of the situation and feel comfortable with your decision. Anything less and you could find yourself in a situation that will cost you far more than you bargained for. However, if you can put the pieces together the right way, you can be on your way to becoming a worldwide real estate investor. So you can live the dream of owning property in a land far away.
When you are buying a house overseas you should know yourself, your motivations and preferences. Also, be sure how well you’ve researched your chosen destination. You know your level of commitment, your level of readiness, and your tolerance for risk.
Before buying an international real estate, it’s important to be aware of your legal rights and obligations. Putting together a home buying team that includes a real estate attorney, an international real estate agent, and a mortgage lender who is familiar with the ins and outs of foreign real estate purchases can help the process go more smoothly.