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A Beginner’s Guide to Owning Foreign Real Estate
If you’re like many other world travelers, you’ve probably daydreamed about owning your own property in a foreign country. Buying property abroad isn’t an unreasonable dream. The proper planning and research goes a long way.
However, there are many potential pitfalls in buying real estate abroad, which would never occur to someone in the US. Every country has its own customs and laws to navigate. In some countries, it can be just as easy to purchase property as it is in the US. In others, it simply isn’t possible at all.
The purchase of your new home isn’t something to take lightly. There’s potentially a lot to lose if you run into any obstacles.
Review These 5 Tips To Get You Started With The Purchase of Foreign Real Estate:
Understand The Big Picture
Purchasing real estate in another country isn’t a minor undertaking. However, many US citizens have found numerous advantages to buying real estate and living overseas.
It’s important to investigate all the laws associated with owning real estate in your target country. Laws vary tremendously!
Some countries have laws against foreign ownership of real estate. Other countries permit the ownership of land improvements or structures, but not ownership of the land itself.
Understand the economic picture of your potential new country. What’s likely to happen to your property values in the future?
Is your new country safe and politically stable? Do your research. The US state department website www.travel.state.gov can provide some insight.
Seek Assistance When Necessary
Consider hiring an attorney and a real estate broker in the country where you’re interested in purchasing the property.
Did you know you can purchase property in Malaysia, but when you sell the home the money from the sale must stay in the country? Experts would know and can help you with these technicalities.
You Might Have to Pay With Cash
Many countries lack financing options commonly available in the US. Even if you’re able to find a mortgage, you’ll likely be required to have a down payment of 40% or more.
Have you ever made a bribe? While bribes are frowned upon in the States, it can be a common business practice in other parts of the world. Your overseas real estate agent will know the ins and outs of bribes in your country of choice.
The good news is the bribes are usually quite low. The $100 range is common. It might only be needed to speed things along. In fact, bribes might actually be required!
Be Aware of Property Taxes
Property taxes are required in some countries and not in others. Some places even have a special tax rate for foreign property owners.
Titles aren’t as certain in many other countries. In the US, you get a title and purchase title insurance. The situation frequently isn’t as clean in other countries.
Ensure You’re Well Protected
In many other countries, a notary also does the equivalent of a title search, so use a notary if necessary.
What happens upon your death? Although it’s difficult to consider the worst, planning ahead in case of your passing is crucial. Again, every country will handle this unfortunate circumstance a little differently.
Does the local government take over your property? Do your heirs have any claims? It’s best to find out now so you can make the appropriate arrangements.
Owning real estate in a new country is an exciting endeavor. You can make it happen if you take the proper steps and proceed cautiously. These tips are only a starting point. The specifics for your country can be found with further research.
Take your time, hire the necessary experts, and do what you can to become an expert yourself. If you proceed in a methodical way, your new home could come into your life quicker than you anticipated!