Why Go International
Investors choose to acquire a rental property in other countries for several reasons. For some, it offers a way to diversify a real estate investment portfolio and achieve higher returns. Several investors search for locations that tend to attract tourists but have a low cost of living. These places can make for higher rental income in some cases. One more top reason to invest in international real estate is to prepare for retirement. While many cities in the U.S. can strain the average retirement income, there are several locations around the world where costs are lower, and retirement funds can last much longer.
Things to Know Before Buying
Certainly, there are several things you need to learn about your desired location and property before you invest. These include:
- Laws: Every country has certain laws that govern real estate transactions. Uncertainty about the applicable laws could produce complications ranging from property rights disputes to delays in the purchase process. It is advisable to know the laws that apply in your case!
- Citizenship and Ownership Rights: In other countries, property can only be owned by citizens. Other countries may also have different ideas about what constitutes ownership, and establishing or passing on that ownership may differ from how it’s conducted in the U.S.
- Currency: Changes in currency are quite common and hard to predict. When executing any major financial transaction, you should be prepared for currency exchanges to be rather fluid and, in some cases, may experience losses as a result.
- Stability: Living anywhere outside of your country of residence comes with certain political risks, mostly 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.
Financing
Another key consideration of buying rental property internationally is financing. Few U.S. lenders will even consider loaning money for property outside of the country, which leaves investors with a range of alternatives. Numerous investors pay cash or use funds from a retirement account to purchase a property outright.
This is likely the fastest route to take, though the most expensive. In certain situations, 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 watchful about scams; many would-be scammers perceive foreign investors as easy targets.
If you’re a remote investor looking into purchasing rental property in Arlington and the surrounding areas, Real Property Management Meridian can assist! Our Arlington 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.