An important fact about owning rental properties is that there’s no need to stick to a single local market with today’s technology. In certain situations, buying outside of the town or city where you live can be far more profitable and offer you new opportunities and perks. You may even want to consider buying rental property in another country. There are multiple valid reasons to do so, from diversifying your investment portfolio to planning for retirement. However, buying property internationally can also be a tricky process. For this reason, you have to know as much as you can about your desired location and financing options before buying property abroad.
Why Go International
Investors opt to purchase a rental property in other countries for many reasons. For some, it offers a way to diversify a real estate investment portfolio and achieve higher returns. Some investors search for locations that tend to attract tourists but have a low cost of living. These areas can make for higher rental income in some situations. One more convincing reason to invest in international real estate is to prepare for retirement. While many places in the U.S. can strain the average retirement income, there are numerous areas around the world where costs are lower, and retirement funds can last much longer.
Things to Know Before Buying
For sure, there are a lot of things you have to know about your desired location and property before you invest. These include:
- Laws: Every country has different laws that govern real estate transactions. Uncertainty about the applicable laws might cause issues ranging from property rights disputes to delays in the purchase process. Make sure you are familiar with the laws that apply in your case!
- Citizenship and Ownership Rights: In some countries, property can only be owned by citizens. Different countries may also have distinct ideas about what constitutes ownership, and establishing or passing on that ownership may differ from how it is done in the U.S.
- Currency: Changes in currency are quite frequent and complex to predict. When performing any large financial transaction, you should be prepared for currency exchanges to be rather fluid and, in some cases, may experience losses as a result.
- Stability: Residing anywhere outside of your country of residence comes with certain political risks, primarily if the country’s government in which your property is located isn’t stable. You may risk losing your property, income, or related assets if worse comes to worst.
Another essential consideration of buying rental property internationally is financing. Few U.S. lenders would even consider loaning money for property outside of the country, which leaves investors with a range of alternatives. Many investors pay cash or use funds from a retirement account to purchase a property outright.
This is the most straightforward route to take, though the most expensive. In certain circumstances, you may be able to qualify for Golden Visa or other country-sponsored programs or work with lenders in the country where the property is located. Just be careful about scams; many would-be scammers consider foreign investors as easy targets.
If you’re a remote investor looking into purchasing rental property in Warwick and the surrounding areas, Real Property Management Providence can help! Our Warwick property managers work with investors of all sizes to help assess properties, locate off-market deals, and much more. Contact us to learn about your options.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.