Is buying property abroad the safe bet it’s been sold to be? Find out how to navigate this profitable landscape with our cheat guide to overseas real estate.
Did you know the value of the overseas real estate market is estimated at over 326 trillion dollars? It’s the largest class of assets in the world, outweighing the likes of stocks and bonds without even breaking a sweat. Everyones talking about bitcoin and NFTs, yet property remains the true king. So, there’s no reason why you shouldn’t put your hard-earned savings down and make your money work for you, right?
Maybe that holiday home you’ve always wanted?
Well, it turns out there are a few gaping pitfalls along the way that can take your riches and turn them into ruin. The ones success stories fail to mention. Don’t let that stop you because it turns out there’s a bit of a recipe to success when it comes to buying real estate overseas. Do you want to find out how?
Laying Out the Plans for Success
The age-old saying “if you fail to plan, you plan to fail” is timeless for a reason.
It gives you the chance to map out how you’re going to achieve your dreams. And more importantly, what those dreams actually look like and cost. Unless something drastic has changed, they’re not making more land. This key factor allows a property to accumulate in value and is the reason buying overseas real estate is such a reliable investment.
At the same time, it’s still vulnerable to supply and demand.
Every country has its own set of rules and regulations. So, before crunching any numbers, you’ve got to know where you want to buy. Before you grab a globe, close your eyes, and spin, there are a few factors to take into account:
• Exchange rate
• Political climate
• Any potential language barriers
The reality of a recession is one we can’t ignore. While nobody can predict the future, it’s vital you understand the market in the country that’s caught your eye. The best countries to do business in don’t necessarily have a booming real estate market, either.
Property prices don’t go up. They follow the trend of inflation, making it a handy metric to look mystically into the beyond. Nothing is more crucial than your eyes when investing in real estate overseas. Believing you’re buying something incredible based on a picture is simply asking for trouble.
You need to see the sight, so to speak. It gives you a chance to suss out the neighborhood and get an indication of whether prices will go up or down. After all, you want your overseas real estate to appreciate over the next 20 years—not drain your savings within a few months. Remember, while you may feel like you’re contributing and helping another economy, governments see things differently.
In most cases, countries believe it’s you that should be grateful. As a result, they charge exorbitant transfer fees and maintenance costs. While you can’t avoid these expenses, it’s important you know they’re part of the deal. Besides, accounting for hidden bills and adding some wiggle room to your budget is always a safe bet.
The Bubble Can Always Burst
Nothing is certain when buying real estate overseas, but you can learn to read warning signs. While each country has its unique challenges, there are a few golden rules to keep you on a profitable path.
- Never assume a property is a good investment based on an expensive price tag. Many sellers abroad attach sentimental value or hike up the price because you’re a foreign buyer.
- Nobody is honest in real estate. Everyone wants the best deal for themselves. Triple-check everything so you don’t lose out.
- Find a translator you can trust if you have your heart set on a location but don’t speak the local language. Even more importantly, ensure they’re familiar with the culture and customs.
Streamlining Your Portfolio
Regardless of how much overseas real estate you plan on owning, it’s in your best interest to streamline your portfolio. In other words, make it simple to assess the value of each property. That way, you’re comparing oranges and oranges, not a whole fruit bowl.
Here are five tips to make investment life so much easier:
- Use cash if you can. Not only does it speed up the transaction process, but it puts you in the fortunate position of negotiating a discount.
- Open an investment account for funds as not all countries will give foreign borrowers a mortgage.
- Measure in metrics. A tried and tested technique for investing in overseas real estate is to assign a dollar per square meter value to every property.
- Stick to capital cities. The demand for houses tends to always outway the supply in areas with better infrastructure. It also opens the doors to potential rental income.
- Start with the cheapest, ugliest property in the best neighborhood and expand your options from there.
Don’t Be Desperate
They say patience is a virtue, but if you want to make money in overseas real estate, you’ll need to learn quickly.
Many homeowners, especially in countries like Eastern Europe, have lived their whole lives in one place. A lifetime of memories under a single roof can hold up a deal for ages. It also leads to a seller uttering the dreaded phrase, “We’re not desperate.” Rather than putting all your effort into a specific holiday home, it’s best to have a few alternative options.
Your Cheat Guide to Overseas Real Estate
Investing in overseas real estate remains the most profitable way to expand your personal wealth.
In fact, a holiday home may be the best retirement plan out there. Before adding houses to your portfolio, ensure they offer positive returns in the years to come. Overseas real estate isn’t a liquid asset you can sell or buy quickly. It’s a long-term investment that requires patience and a sharp eye for details. There are a few tricks you can use to make decision-making easier, but dealing with people is always unpredictable. That’s why a backup plan is essential. Navigating this complicated investment landscape might look daunting, but if you know the way, it’s a walk in the park.
Why not book a paid consultation with Innovation Park and allow us to help you diversify your property portfolio?