Investing in offshore real estate is a popular wealth creation strategy, and since globalization, many countries welcome foreign direct investment (FDI). No surprise, the USA is a top recipient of FDI, and real estate gets around 10% of it.
It’s not just institutional investing in real estate. Property investors from just about anywhere can work the online process to buy an investment property in a top country.
These properties are a great way to diversify your portfolio, earn a second income, or invest in a high-yield property without being present in a foreign country.
The key to making the most out of overseas investment properties is identifying the right countries where the property value is at a price that appeals to you.
Therefore in this property blog, we look at how to find the offshore property that works for you and then five countries that should be on your radar if you’re looking to buy an investment property in a foreign country.
Buying An Overseas Investment Property
You’re probably already an expert at finding investment properties near you. Well, you can use it to serve you well once again. Once you know your budget and what type of property you’re looking for – you can switch your attention to locations. You first need to identify a country, region, or state and then a city in this instance.
Thoroughly research the country’s legislation regarding offshore property investment, so you know your obligations before you get hooked on a desirable state and location.
Your country and region research should include:
- Foreign direct investment friendliness
- property legislation and taxes
- political stability
- economical and environmental status
You may also be concerned with diversity and inclusiveness and the local population’s attitude towards foreigners and foreign property ownership.
Just like you do in your region, also find out which industries are doing well as that will confirm if the area is an excellent place to invest and that your property manager can easily choose suitable tenants with good incomes.
Also, once you’re sure you have a country and area sussed – get your power team working for you, including:
- Real estate agents
- Legal experts
- Tax professionals
- Property managers
Use licensed real estate agents with experience dealing with offshore homebuyers and investors.
One or more lawyers. You may use your preferred law firm to liaise with a local lawyer or conveyancer for the real estate transaction (sales & purchase) documents.
Investing in real estate in another country can be tricky, and you should make use of free tools too, like a real estate investment tracker from the country you’re keen to invest in. Or use a Google extension to track price changes in property values from just about anywhere – London to Sydney, you choose.
Technology is your friend when it comes to research. Also, use property discussion forums and property market blogs. Where there’s a will, there is a way to get the information you need to remain informed and ready to choose the suitable investments.
We’ve already mentioned the USA and Canada is also a hotspot for offshore property investment. So much so that Canada had to make it tougher for offshore investors to purchase real estate as a housing crisis is still somewhat out of control.
France is home to Paris, which as you probably know is the most sought-after tourist destination in the world. Imagine owning real estate in Paris!
The whole country is a tourist drawcard. Plus in 2021, French real-estate prices increased 5.9% . With another uptick in values expected in 2022.
The 2008 financial crisis heavily hit the Panamanian real-estate market – but unlike most nations, it made a speedy recovery and has been on an uptrend in terms of growth over the past decade.
The Panamanian property market revolves around rental properties and agricultural real estate.
The rental property sector has been doing exceedingly well in recent years due in large part to the country’s tax incentives.
For instance, the country’s income tax rate is set at 0% for foreign nationals who earn their income from working with international clients.
In other words, remote workers and digital nomads can live in Panama without paying a single penny in income taxes – making it an attractive destination for individuals who work from home.
Property taxes are also ridiculously cheap in Panama as primary residences typically command a tax rate of 0.5%-0.7% for properties valued over $120,000 while properties valued under $120,000 are taxed at 0%.
Over the years, Indonesia has become a significant tourist attraction. It is one of the most popular south-Asian countries, with a budding real estate market that investors have ignored.
However, the serene islands of Indonesia and the broader real estate market are coming into the limelight.
The Indonesian economy has also been on the rise, focusing on infrastructure and services. GDP growth of5% in the final quarter of 2021, is one of the highest in the region attracting more foreign investment.
The beachfront property investment opportunity that Brazil offers investors is quite rich.
This coupled with the low value of the Brazilian currency against the US dollar, makes it attractive to foreign investors as it makes breaking into the real estate market easy and affordable.
Investing in property is a popular wealth growth strategy – a hedge against inflation. Buying overseas property is a way to diversify your investment portfolio while also taking advantage of the favorable tax rates in many countries worldwide.
However, always do your due diligence and have your power team working for you to minimize what could be costly errors. Plus, always consult your financial advisor and accountant before agreeing to borrow funds.