How to invest in real estate overseas
Property is one of the most stable growth investments available, and is attractive to many investors because it is clearly tied to tangible assets and has the potential to result in massive gains.
However, there are also many misconceptions about real estate investment, such as that it takes enormous initial investment funds and is only available to the wealthy, can only make returns over the long term, or is best done locally.
Thankfully, popular networks such as HGTV are opening the eyes of more potential investors to the possibilities of short-term real estate flips and international real estate options. The best choice for you likely depends on your budget, skill set, taste for risk, and desired return on investment. Here are five tips for investing in real estate overseas.
Know your budget
Any investment needs to start with an honest and realistic look at your budget. Don’t automatically assume that a modest budget disqualifies you from real estate investing, however. It’s possible to band together with partners for a joint investment, or to focus on areas where currency exchange rates and lower real estate costs work in your favor. In some cases, investors bridge financing for a short-term investment with the intention to flip the sale and make money in a matter of weeks to years, knowing that they couldn’t and wouldn’t want to carry that expense over the long term. However, it’s also important not to overextend yourself because any investment can carry inherent risk.
Follow your interests
With so many potential locations to invest in, following your interests can help narrow the field. If you enjoy a certain type of climate, a certain region, a language, lifestyle or a culture, this can help you identify an area to investigate further. It also helps to be realistic about your likes and dislikes to avoid investing in an area that you don’t appreciate or understand. This is particularly important if you want to use the investment as a second home, vacation spot or rental.
Define your goals
Work out what kind of investment you’re interested in. You might choose properties in disrepair and upgrade them to earn money, or you might buy properties under development to sell once they near completion. You might want a property that you can use for your own vacations, or as a vacation rental, or as a long-term rental to help cover costs, in which case you’ll need to be prepared for property management costs and responsibilities.
Research your location
It’s important to do thorough research before investing. You want to understand environmental, political and economic impacts to avoid surprises that could impact your investment.
Compare exchange rates
Real estate investments involve relatively large sums of money – even the more modest ones. Exchange rates and fees can really add up, taking a big bite out of your gains and increasing payments beyond what you had budgeted for. Do research to get the best deal on overseas transfer rates – you can save significant sums by comparing services ahead of time.
Overseas real estate investment is an exciting opportunity to grow your wealth and improve your lifestyle. Make the most of it with careful research, clear goals, a defined budget and the best exchange rates and fees on the market.