There are a lot of aspects that are to be taken into consideration before investing in overseas real estate which may lead to many arising questions regarding the local protocols, property availability, right area, price range, legal procedures, payment policy, taxes and stamp duties and many more!
These are the 5 questions that we think you must ask yourself before buying any property overseas, whether it is your first purchase or you’re just looking to make your next investment.
Why do you want to buy a property? Do you want to buy a retirement home for you and your partner? Or an apartment for studying and working family of 4? Do you want to buy a piece of land or an office building? The answer to all these questions is hidden in your purpose of buying the property. While a cosy beach house may be the perfect option for a retired couple who is looking to buy a second home, that might not be the best choice for a family with students and white collars. If you want to purchase a home, you’d probably prefer a new place that is in a nice neighbourhood and has easy access to employment, institutions, and other important places. But for commercial or industrial properties, the neighbourhood does not really matter a lot, you would want to be looking for something that can be utilized in several ways, will generate incomes, and is affordable.
2. Location and space
We know that different countries are famous for different reasons. For example, tropical developing areas are more suitable for vacation or retirement, whereas developed cities are mostly for people who are still in some stage of their career or student life. These points will help us decide which cities or states of which country we should aim at, for which we need to do a lot of research and that brings us to the next point.
Laws and regulations vary from country to country, state to state, and even city to city. As a foreigner, it is the most crucial part before making any investment. Some countries do not even allow foreigners to own property. So, before moving forward, we need to confirm whether we’re allowed to make an investment in the targeted country. If yes, then what are the regulations? How different is it from one’s homeland? What are the tax policies? Is it the same throughout the nation? What about licenses and permits? How long does it take to process the application? Is the property a lease-hold or a free-hold? What are the metric units? What happens when you are not there? Is the place safe enough? Is the local law going to give any kind of protection to your property in your absence?
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Before making any decision, there should always be market comparisons and backup options in terms of pricing. It might be hard to get all the boxes checked but money undoubtedly is a major factor in any kind of investment. It is not only limited to currency rates and overseas transfers. It also involves extra taxes that can vary from place to place and can actually amount to a huge figure. Buying a property overseas means managing finances in two different countries and it is very difficult to manage the finances of a country that you do not reside in. To handle finances overseas smoothly, investors often tend to hire a professional.
Click here to look at an example of securing exchange rates
Once you’ve found your perfect property that fulfils all the necessary criteria, this is when you need to take a short pause and ask how the future looks like for the property you chose. How is the market now and how is it going to be in the next 10 years? How is the growth now compared to the past decade? How are the upcoming years looking like for the type of property you want to purchase? Is the demand high or low? Is the growth strong or soft? How big is the scope of growth? Is it already a well-developed city that will have a stable market in the next few years or is it going to see a rapid change?
With these questions, you can understand more about your preference and what is the scope of your property search. By knowing which are the most relevant factors to consider it makes your property search so much easier, ultimately making your property investment journey a much more enjoyable journey.
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At Denzity, we help you find your next overseas property. If you have any enquiries about the above properties, or questions about the process, reach out to our team here. Stay tuned for more investor focused content, financial advice, and industry updates.
Please note all the above stated is opinion only and does not constitute proper investment advice. Denzity is not liable for any investment decisions that result from following the opinions outlined above.