Tips for Buying International Real Estate- By: Krista Kehoe
Many people view purchasing overseas property as an exciting, and hopefully, lucrative endeavor. While daunting at first, owning real estate in a different country can be financially and personally rewarding if you take certain measures to ensure that your investment is a good one.
Talk to a reputable attorney who can help you understand the laws of the foreign jurisdiction where you are considering buying property. Some countries like Spain have a property registry. Your solicitor can check this registry to confirm the owner of the property and to check for any outstanding mortgages on the property.
Any land you purchase should be purchased via record title. You need proof that the seller is the record title holder and that your title is also recorded. If there is no documentation proving property ownership, the transaction should end.
Never buy property that you have not seen in person. In some countries, it is the buyer's responsibility to know what they are buying and the owner has no obligation to disclose anything. A property should never be bought based on pictures, promises, or verbal declarations.
What are you planning to use the property for? If you plan to rent it out, consider buying a property that offers a rental management agreement. If you plan to leave your property vacant, consider hiring a local property manager to ensure squatters do not occupy your property in your absence.
Some investors recommend going on a familiarization (FAM) tour as a way to make foreign real estate investing a little easier. Choose a tour that focuses on a range of opportunities in your desired location rather than a tour which focuses on one property. Tours usually last three or four days and consist of small groups of people. These tours provide buyers with information about legal issues, property management, and title insurance. Choose an investor FAM tour that is offered by a reputable company and use the tour as an opportunity to develop local contacts.
Whether or not you participate in a tour, it is recommended that you narrow your search to a specific area. As well, it is advisable that you only invest in completed projects. Bare land with an ocean view may not ever get developed into the beautiful sketches you were presented with at the time of purchase. View a wide variety of properties in the area prior to making a decision. Talk to other foreign investors about the area. Do some preliminary research and ask relevant questions. The comparisons of different properties will be up to you, so make sure you know what the right questions to ask are.
Finally, do not feel pressured to make a purchase. International real estate investments take time. You need to find the right area to invest in, a good property to purchase, and do a complete analysis of your investment to ensure that you have a positive cash flow and a good likelihood of healthy capital growth.
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