FIVE QUESTIONS YOU NEED TO ANSWER BEFORE BUYING A PROPERTY OVERSEAS MARGARET SUMMERFIELD
You should always check out a property in person
before you sign a sale contract to make sure you’re getting
what you’re paying for and that it’s right for you.
Figuring out why you're buying will help you focus
on the properties that best fit your needs. Plus you
can set up ownership of the property so that you
can get residency or offset capital gains or rental
income taxes from the get-go.
2. How will you buy it?
Of course, cash is
king. But investors looking for leverage and buyers
without a large nest egg may prefer to use
4. How will this property fit with your
portfolio?
You know that your investment
financing. It's tricky to get bank financing overseas.
It often comes with high interest rates and strict
portfolio should hold different types of assets. In
the same way, you should diversify your real estate
age limits. Seller financing isn't common, either.
portfolio. Don't put all your money into one market:
Your best option is developer financing. That will
guide the type of property you buy (it usually only
applies to pre-construction property) and where
you buy (it's easiest to get developer financing in
buy property in different countries. You should buy
a mix of property, too. Don't buy lots of land
parcels that you'll sit on long-term while you wait
for prices to rise. Instead, you could buy a land
parcel for capital growth and a commercial or
markets like Mexico and Brazil).
rental property for income.
3. What is your appetite for risk?
not
an experienced
investor, or
If you're
you're
Figure
not
comfortable with the idea of risk, that will decide
where you buy and what you buy. You'll probably
prefer to buy a re-sale property rather than a preconstruction one. You'll buy in a higher-cost bluechip neighborhood rather than gamble on a
developing one. And you'll skip emerging markets
and stick to stable, established countries with
decent buyer protections in place.
5. How much time can you invest?
out how much time you can really allocate to your
overseas property. If you're not going to live there
full-time
and
don't
want
to
take
care
of
maintenance, repairs or paying property taxes, find
out if you can get a good property manager. If it's a
rental property, find out if you can get full rental
management services. Ask if the rental manager
will take care of cleaning, repairs and paying utility
bills as well as finding a tenant.