Real estate investment can be very lucrative for those willing to spend their time and money on it.
On the other hand, international real estate investment can be an even more exciting venture to go into if you have the capital or financing access for it.
However, if you plan to invest in the latter, you should carefully assess and map out your strategy before you start sending your money overseas to buy up real estate. If you make wrong decisions, your money could get stuck in a bad deal for a long time.
Keep in mind the tips in this property blog post on avoiding making any mistakes and getting into trouble in international real estate. In addition to reading the information here, you can check out PropSocial and other similar sites if you want more information about overseas property investments.
6 Ways To Get Ahead In International Real Estate
What can you do to save yourself from expensive blunders in the international real estate scene?
1. Understand Where The Market Is Headed
The first thing you have to remember about international real estate investment is understanding where the real estate market is headed in specific places. For instance, if you’re thinking of investing in Europe, you should know the region’s real estate trends and state.
On the other hand, if you already have specific locations in mind, you must study the development and land use plans. You ought to know whether they’re planning to build residential properties near manufacturing or industrial zones. These things can have an impact on your real estate investment.
Also, remember that buying anything outside the country is a long-haul investment. You won’t realize your gains yet until after a few years down the road.
2. Understand Real Estate Laws
Another thing is that you have to understand the real estate laws in the country of the place or location where you’re thinking of buying property. A working understanding of real estate laws is needed so you can make sound decisions about where to invest and which properties to buy.
You don’t have to be an expert on real estate law. You need some functional knowledge so you won’t make blind decisions about where to put your money.
Of course, you can always consult a real estate lawyer about specific provisions and complex issues. But knowing a bit about real estate law will reduce your reliance on a lawyer and allow you to be confident in your actions.
To give you an idea of what to focus on when it comes to learning real estate laws, here are some guiding questions:
- Does that country allow foreigners to own property?
- Is foreign ownership restricted to specific forms or types?
- Will the government enable you to remit rental income back home?
- How does it tax foreign-owned real estate property and income?
3. Know Real Estate Practices
Aside from real estate laws, which you can know more about in books and blogs, you should also know even a bit about the real estate practices in the country where you’re planning to invest. Again, you don’t need to be an expert on this. You only have to gain some knowledge of how they do business in the real estate industry.
Learning those practices is essential, and those practices will come in handy when you have to make decisions and choices about your property investments. Among those things you should know are the following:
- What are the property valuation techniques and practices?
- Does that country allow foreigners to borrow money from banks to buy real estate or acquire property for investment?
- What are the expected cash flow opportunities for investors?
- What are their local practices on funding real estate investments?
- What are their local rules on payment of rental and leases?
4. Practice Due Diligence
Suppose someone offers you real estate deals or opportunities, practice due diligence. Even if the offer looks so sweet and enticing, hesitate to say yes and start checking it out. Of course, you don’t have to be the one to do it. You can always ask someone to check it out.
5. Consult An International Tax Specialist
No matter how much expertise you’ve gained by yourself personally or professionally in real estate, it would also be advisable for you to consult an international tax specialist or practitioner before you invest in overseas properties. Putting your money in real estate overseas will have a lot of implications for your income taxes.
Always keep in mind, different countries have different tax systems and laws. Many countries allow taxes paid in their countries to be credited in the U.S., but rules and regulations can vary. It’s best to ask somebody who knows this kind of stuff.
6. Hire Resident Administrators
Aside from consulting real estate and international tax specialists, you should take care of the property on the ground as well. You can do that by hiring a resident administrator or local property manager who can visit and take care of the properties. You especially need one if you’re going to lease the properties.
You can rest easy regarding property maintenance, lessee screening, and rent collections when you have someone on-site.
International real estate investment is a long-term venture for the most part. Except for small investments in turn-key properties for rental income purposes, you won’t see your money return for quite some time. For this reason, you should carefully study before you go into international real estate investment.
Some of the rules discussed here would be a helpful guide for your plans and goals.