A couple of years ago, Americans enjoyed what was almost a shopping spree of property abroad. Backed by a strong dollar and the fact that other countries’ economies weren’t doing so well, it was easy for people from the U.S. to become real estate investors overseas. Now, however, with the value of the dollar down, the activity of Americans on foreign property markets might be reduced.
But buying property overseas is still a great investment opportunity. Whether you want to move to another country, use your property as a summerhouse and rent it the rest of the year, or just flip it, getting property abroad can make a lot of sense financially. Or at least it could if you knew the things you should be on the lookout for when buying property overseas.
The Legal Landscape
Other countries have property laws that are not the same as the ones you enjoy in the United States. And by the very virtue that you are buying property in a foreign country, you acknowledge that your property and the purchase procedure will be governed by the laws of that country.
In practice, that means two things. One is that you will have to seek help from a local lawyer. The other is that you will have to face certain limitations. Many places will not allow you to own land as a foreigner, for example. Some will go a long way to prevent you from doing it. According to Richard Lusted, the CEO of Siam Real Estate, Thailand is one of them. “Even recent amendments that allow a Thai spouse of a foreigner to buy land require proof that the money used in the purchase of freehold land is legally solely theirs with no foreign claim to it,” said Lusted. You should look out for these regulatory limitations, as well as the ways to circumvent them.
Get Help, But Choose It Carefully
You will depend a lot on the people you hire to help you purchase a property overseas, probably more than you would if you were buying property in the U.S. Not only will they help you navigate the local legal framework, but they will also be your eyes and ears in the foreign country if you cannot be there yourself to see the purchase through from start to finish.
There are several ways you can look for professional help abroad. What’s important is that you understand that lawyers and realtors are professionals who often live or die by their reputation. That means that you should be able to check it before you commit yourself to hiring them. If you can find a lawyer and an agent based on the recommendations of a reputable source, that would be the best. Otherwise, look online, look at local listings and equivalents of the BBB if they exist. It’s paramount that you get good assistance.
When you want to buy property abroad, you will, of course, have to study the market before making the purchase. Even if you don’t plan to profit off your purchase, if you can save some money by waiting a couple of months, you might decide to postpone your purchase to a later date. Even though the global housing price index has been steadily climbing, there are huge variations that will present you with great opportunities.
The one things you should watch out for are very volatile markets. Markets that are about to experience a bursting of a bubble might look favorable at the moment. You should consider, however, that burst bubbles often cause political and social strife that might put your property in danger. Unless you’re feeling very adventurous, you might want to steer clear of markets with flimsy property rights in countries that have a weak rule of law.