Things to Consider Before Investing in International Real Estate

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When considering an investment in real estate, many investors limit their opportunities and potential by only looking at local properties. Investing internationally is an exciting project but it does carry certain risks. Nevertheless, it’s gaining popularity each year as it offers investors the chance to diversify their portfolio and try something new.

By taking necessary precautions, foreign real estate investment can ensure significant profit growth but there are things to consider before venturing out. These are the tips that can help in minimizing the risks and maximizing the gain.

Get to know the market

Before you even look into potential properties for investment, get familiar with the market. Learn as much as you can about the country of your interest, local customs, culture, and mentality. This will make your property search easier and more effective. It’s almost the rule of thumb that if something works in one country, it won’t do so in another.

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Don’t rush in

Any property investment is a serious and costly endeavor so you should take your time, especially when investing internationally. Don’t rush in just to get it over with. It’ll pay off to do proper and thorough research, learn all the local rules, laws, and regulations, and see what your possibilities are. Naturally, not every investment that is rushed will necessarily be a bad one, but by taking your time, you’ll significantly reduce the risks involved.

For instance, in some countries, it’s illegal for ex-pats to own property. In others, it’s possible but with strict restrictions on the type and location of the property. Moreover, commercial properties in different countries have different tax implications as well. In any case, it’s prudent to hire a reputable local lawyer and an accountant who can act as your advocates, look into all requirements and regulations, and be on-site when you can’t.

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Prepare your budget

Buying property at home is generally a simple and straightforward process – you either pay in cash or apply for a mortgage with a variety of choices. Unfortunately, there’s no such luxury when house shopping abroad. As a non-citizen, you probably won’t get a mortgage, and even paying in cash can be an issue when it comes to exchange rates.

Make sure you have a clear and solid financial strategy before securely buying the property. Once more, this is where you can benefit greatly from having a local professional on your team.

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Look for expansion potential

One thing experts point out when buying real estate internationally is looking for properties in places that have a bright and promising future. Lots of small and not fully discovered countries offer vast growth potential for investments, like the ones at Western Balkans. For instance, prestigious luxury marina real estate is popular in Montenegro, as this gorgeous little Adriatic country has seen significant expansion as a holiday destination in the last decade. This type of real estate gives new owners not only a beautiful waterfront property but also access to a wide range of exclusive benefits in the area, such as helicopter excursions, preferential boat tour rates, car hire, yacht charters and many more. Places like that will continue to develop and can potentially bring excellent profit in future.

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Eliminate the language barrier

Even if you’re not planning a permanent relocation, you will need to be actively and directly engaged with international agents when purchasing your property abroad. This could be difficult if there’s a serious language barrier as it can lead to miscommunication, delay, and extra costs. While you can overcome this problem by taking your time and making the effort to learn the local language, it might just be more time-effective to hire legal professionals with appropriate skills and knowledge.

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Secure property management in your absence

Unless you plan to live in your property all year round, it’s smart to consider ways of managing it in your absence. If there are issues such as leaks or damage, you won’t be able to just hop in your car and drive there at 3 o’clock in the morning.

What helps here is an excellent person-on-grounds or a property manager who can handle all problems immediately. Another solution can be opting for a gated community that handles all maintenance and security issues for you.

International real estate investing can be very lucrative and extraordinarily rewarding but it certainly doesn’t come without risks. Before you dive in, make sure you cover all grounds – get familiar with local rules and regulations, secure your budget, and have a good team working with you. Even the smallest mistakes can turn out to be very expensive, so do everything you can to minimize the risks and maximize your profit and experience.