Buying overseas property has become very appealing to many Americans – they’re looking at the option of cutting their cost of living by up to 80% by moving abroad.
Today, there are four million Americans living outside of the USA - and more look set to buy overseas property as an investment, second home, or as a place to live.
If you want to buy overseas property, you need to do your homework and look at the big picture.
Firstly, check with the U. S. State Department about the stability, and safety of the countries you may be interested in investing in.
Here are six tips for buying overseas property as an investment:
1. Get Local Help
If you're thinking about buying overseas property, you may want to enlist the help of a local real estate broker to help you with local laws and customs.
When buying overseas property for investment you can’t know everything about the local law (unless you are prepared to spend a lot of time) so for the cash outlay, it’s worth getting professional help.
2. Count on Paying Cash
To figure out what you can afford to invest in overseas property, assume you can only pay cash. You won't find many mortgage lenders offering you a loan in many countries, such as:
Plus many more countries - property is historically paid for in cash.
If you can't afford to buy property without a mortgage, you'll want to check countries that do offer mortgage facilities. Good choices are – Singapore, Hong Kong and South Africa - but you’ll probably still need a 50% deposit for your overseas property investment.
3. Check your Rights
When you buy property in America, you get a warranty title that states that you are the owner of the property. However, if you buy overseas, sometimes the distinction isn't as clear - it depends on the country you're buying in.
For example, someone could come back and make a claim on the land even though you have bought it! This happens a lot in Eastern Europe where World War 2 displaced millions of people, many boundaries changed and fights continue for ownership of property, seized during and after the conflict – be careful.
Another example, is Nicaragua – even though you’re a foreigner, you get the same rights as a Nicaraguan resident - but if the Sandinistas get into power, that could all change!
4. Look at the Big Picture
When you buy overseas property, look at how stable the country is now - and how stable it’s likely to be in the future - things can change.
5. Property is Cheap for a Reason
If overseas property is cheap - there’s a reason for it.
Overseas property investments are cheaply available in Haiti - but of course, you wouldn’t invest there. This is an extreme example - but people have an obsession with cheapness – remember it’s value and long-term growth potential you’re after.
Of course, things can change but don’t take a salesman’s word for it - some areas will do well but most won’t. If you’re looking for hot overseas property investments, then they’re available in most countries of the world - study all the facts and make up your own mind.
6. Buy in a Market with a Track Record
Don’t buy overseas property investments on the basis that the market will take off - buy in a market that’s already moving - i. e. prices are already increasing - and look set to continue.
Many property markets touted to take off never do. If you want to be a pioneer go ahead - but remember most of the early pioneers were killed!
You should look for a trend in motion - prices rising, and investment in the country on the increase – as well as good future potential.
Do your Homework
Do your homework when buying overseas investment property - and make sure you take a cool detached view. Study ALL the facts - from legal rights, to future potential - and you can look forward to some great gains.
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