An important fact about owning rental properties is that there’s no need to stick to a single local market with today’s technology. On certain 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 attempt to examine buying rental property in another country. There are many valid reasons to do so, from diversifying your investment portfolio to planning for retirement. However, purchasing property internationally can also be a complicated process. That being the case, you need to know as much as you can about your desired location and financing options before buying property abroad.
Why Go International
For a variety of reasons, investors want to purchase a rental property in other countries. For some, it offers a way to diversify a real estate investment portfolio and achieve higher returns. Some investors prefer locations that tend to attract tourists but have a low cost of living. In certain situations, these places can make for higher rental income. Another compelling incentive to invest in international real estate is to prepare for retirement. While many cities 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
Of course, there are many things you need to know about your desired location and property before you invest. These include:
- Laws: Every country has different laws that govern real estate transactions. Not understanding the applicable laws can lead to problems, from property rights disputes to delays in the purchase process. Be sure to know the laws that apply in your case!
- Citizenship and Ownership Rights: In some countries, property can only be owned by citizens. Different countries may also have different ideas about what constitutes ownership, and establishing or passing on that ownership may differ from how things work in the U.S.
- Currency: Fluctuations in currency are quite normal and difficult to predict. When conducting any large financial transaction, it is important to be prepared for currency exchanges to be rather fluid and, in some cases, may experience losses as a result.
- Stability: Living 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.
Another crucial consideration in buying rental property internationally is financing. Few U.S. lenders will even think about loaning money for property outside of the country, which leaves investors with a range of alternatives. Many investors pay cash or use funds from a retirement account to purchase a property outright.
This is the shortest route to take, though the most expensive. In certain scenarios, 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 keep an eye for scams; many would-be scammers see foreign investors as prime targets.
If you’re a remote investor looking into purchasing rental property in Lancaster and the surrounding areas, Real Property Management Traditions can help! Our Lancaster 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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