Should You Invest In An Overseas Rental Property?
If you’re looking for a great investment opportunity, then an overseas rental property can be an attractive prospect. With more and more people choosing rental properties as their holiday accommodation, you could stand to gain from investing in your own rental property.
In many cases, investing in property overseas can be a great way to add value to your assets, but it does come with its downsides too. Investing in property locally gives you better control while being overseas can make it difficult to get issues resolved.
Before you take the plunge, take a look at some more detailed information about investing in an overseas rental property.
Cheaper property, better potential returns
We all know that property makes a good investment, and now that the global economy is starting to recover, house prices are beginning to rise again. If you’re able to secure a good deal on a property, then you could soon see it increase in value. Many countries offer cheaper properties than you’d expect, so you could get a bargain on a cheap property if your investment total is low. Keep an eye on the global property market to scout the most attractive options.
The rise of up and coming travel destinations
How do you choose where to invest overseas? A good place to start is to do some research online about where’s best to invest in property and make a judgement from there. Many online sources will say that Central and South American destinations such as the Dominican Republic, Panama, and Belize are good options – especially as more people are travelling to these destinations for holidays.
Meanwhile, checking out the most popular tourist destinations can also help you judge where you could find a great investment opportunity. Do you know what the most visited city in the world is? Bangkok – whose visitor numbers grew 9.8% in 2017. While you might not have thought about investing in Thai property before, thinking about the bigger picture and potential returns can be something to consider.
There’s a lot of potential to enjoy a profitable investment from self-catering rentals in Thailand, so searching for Bangkok condos for sale could lead you to some attractive offers. Property is also affordable and good value, so you might be onto a winner by choosing Thailand to put your investment.
Choosing the right location
While you might have settled on a destination to invest in, choosing the right location in that city is the tricky bit. There are several things you’ll need to consider such as what the local amenities are like, whether the location is accessible by public transport as well as if it’s a popular destination for tourists.
When you’re investing in a property overseas for the first time, it can be difficult to get a feel for a place. Investing in an area that has an established market will provide you with more security, allowing you to dip your toe in the water before you make further investments.
Visit before you invest
While the internet makes it easier to carry out all sorts of transactions, you’ll want to make it a priority to go visit your chosen location and property before you make any kind of commitments. Visit to ensure that you’re happy with the area and that your property is as described – you don’t want to get caught short on a blind investment. A visit might completely change your opinion about investing, pushing you to invest elsewhere. However, if you fall in love with the location, you’ll have a great excuse to come back for holidays now that you have somewhere to stay!
Think about the ongoing costs
While rental properties have a lot of potential for making money, it’s worth remembering that they also cost money to run. Aside from the initial sale and decorating costs, you can expect to keep up with a number of other outgoings to keep your property going. Overseas property rental guides can help you to identify the potential costs.
You’ll most likely want to register with self-catering portals, which cost money, while other options like Airbnb also charge for their services. These can be factored into your nightly rate, so think carefully about that when setting your price. Meanwhile, you’ll need to pay people to manage and clean your property, as you won’t be able to do it yourself from where you are. Insurance costs are also something to factor in, as you won’t want to get caught short with any breakages or damage from guests.
After securing your property, the next task will be finding some guests. As mentioned above, self-catering accommodation portals are a good option, with places like Owners Direct being great for convenient searches – although they do come at a price.
The obvious choice today is Airbnb, which has really taken off in recent years. There are some great tips for running a successful Airbnb which can help you make money from your property and start making a return on your investment. Airbnb does have its drawbacks, but as all money is handled safely and securely and their insurance is comprehensive, you are covered if something goes wrong.
Another option, of course, is to advertise to friends and family on social media. Having some people you trust as guests will make it a less stressful process, especially at the beginning and it can be a good trial of how to do things going forward.
Maintaining your property
With an overseas property, carrying out maintenance is more difficult than a property in close proximity. While you can appoint someone to manage your property for you, it’s worth you doing at least annual checks to make sure things are in order and that no extra maintenance is needed. After a few years, you might even want to consider selling up or switching to a new property.
A property management company will be your best approach for maintaining your property, and will essentially take care of everything so that all you have to worry about is your rental income coming in each month. They’re a one-stop-shop for everything, including repairs, cleaning and more and can help take a load off your mind when you’ve found the right company. Do your research before you settle with a company to make sure you’re choosing a reputable and safe option.
The downside of investing abroad
While there are many advantages to investing in property abroad, there are also some downsides. There’s a danger that you won’t be able to cover the mortgage because of a lack of interest, or even face a huge maintenance bill because of some inconsiderate guests.
Not being able to ‘pop over’ to fix a problem can be a major concern for investors, so it’s important that you put some plans in place to guard against the worst. You might also feel obliged to use your property for your own holidays each year, which might start getting repetitive year after year. If it does become a chore to manage, or you want a fresh location – you can always sell up.
Investing in an overseas property can be a good thing for your portfolio, allowing you to benefit from cheaper property prices as well as a satisfying return on investment from renting it out. While there are a lot of things to consider, it could be a great move for you. Be sure to weigh up the pros and cons of investing abroad before you commit to make sure it’s the right decision for you.