When you’re looking for investment options for your savings, you’ve probably thought about real estate. Property prices are on the rise and there are a lot of different ways that you can take advantage of that to make good money investing in property. One of the best ways to invest in real estate is to buy a property abroad. You’ve got more options for renting it out and you can make better money letting it for shorter periods to people when they’re travelling. The prices tend to be a lot lower as well so the initial investment isn’t anywhere near as high. But there are a whole new set of challenges involved with real estate investment in another country so you’ve got to be careful. If you’re considering it, here are some basic rules that you need to follow when investing in property abroad
Be Careful With Up And Coming Locations
A lot of people try to get a good deal by finding somewhere that is an up and coming location where property prices are still low. They buy a property now while it’s cheap and in a few years, when the area turns into a tourist hotspot, the value of that property shoots right up and they make loads of money renting the place out. That’s a great strategy, as long as it actually works. Often, there are a lot of rumours about a place that turn out to be nothing more than that. If you buy a property based on these rumours, you could end up stuck with a house that nobody will rent or buy and the value might even go down. When you’re looking at properties for sale, it’s best to go for well established areas that are already popular. You’ll pay more for the property but you can massively reduce the risks involved.
Don’t Forget About Taxes
Every country has their own rules about taxation when you’re buying a property so don’t forget to do your research. You might have to pay stamp duty or some equivalent as well as VAT on the property and the rates might be a lot higher than they are at home. If you don’t factor this in when you’re pricing up properties, you might be in for a nasty shock when you actually come to buy the place and all of the taxes are added on top.
Rental Laws
There are different laws about renting out a property in different countries as well. In some places, only certain properties can legally be rented out. For example, there has been a lot of trouble in New York recently with Airbnb because there are strict regulations about the type of building that can be used for short term lets. If you don’t check the laws before you purchase a property, you might end up with a place that you can’t legally put tenants in.
There are a lot of tricky legal considerations to deal with when you’re investing in property abroad and it can cause you a lot of trouble if you get it wrong so always do your research properly before you make any decisions.
