Things to consider before buying an house in another country
Are you thinking of buying a house in another country? In case you’re aiming for a tidy investment, this is a good strategy for diversifying your portfolio of investment, setting up the path for a higher net worth, and decreasing the risk profile of the investments you’ve made so far. If you couldn’t resist falling in love with that beautiful vacation spot, this will be the first step towards spending your golden years sipping cocktails and getting your supply of vitamin D somewhere more exotic. Also, if you’re embracing the idea of starting your new life chapter elsewhere, this paves the way towards the life you’ve always dreamed of.
Surely, delving into such an endeavor brings about many benefits, but it also requires arming yourself with quite an amount of knowledge and carefully calculating each step. Here are some things to take into account.
Seek expert advice
Buying a house in another country is far more complicated than buying one locally. That is why you need a couple of professionals to assist you in the process.
Firstly, hiring a professional international buyer’s agent or a property developer will go to more extraordinary lengths than purchasing solo and directly from your chosen property’s owner. Before handing in your money, you ought to know more about the market in which you’re buying this property, find out how to avoid any scams and grievous errors in your purchase, and get the best deal possible.
Secondly, although you’d typically not require one when making a local purchase, you need an independent local attorney to act as your representative and guide you through the legal matters involved in the process in the case of foreign purchasing. Lawyers who specialize in this area speak both countries’ languages. Those stationed in your destination country are the ones to try to find to represent your interests and obtain legal advice from.
If you don’t speak the language of the country in which you’re planning to buy, make sure also to hire an independent translator/interpreter. They will help your communication with international agents and vendors and translate all relevant documentation.By overcoming the language barrier, you will avoid all chances of miscommunication, delays, and other inconveniences that could negatively impact your purchase.
Carefully study their unique body of law
Working with an international lawyer experienced in foreign property transactions is invaluable when trying to understand the nuances in terms of laws and regulations of your destination country. Although you’re most likely eager to move to your new home as soon as possible, remember that each state is different. Since you are on foreign turf, you first need to know the legalrights and obligations that apply to you there.
- Ownership laws. Some countries prohibit foreigners from owning any property on their land, and some designate special zones in which you are allowed to buy. If, on the other hand, you have a green light, you might be required to register with a government agency or obtain a special permit for residence.
- Tenancy laws. Next to foreign ownership laws, there are tenancy laws. If you plan on leasing out your property, check out if any restrictions prohibit you from doing so or whether there is a licensethat you’ll need to obtain to be able to rent.
- Tax laws.A lawyer will also be able to give you a full breakdown of the tax rules and liabilities that apply theresince these also differ from country to country. For instance, if you plan on renting the property, rental income is likely to be taxable there.
Deal with finances
Probably the trickiest aspect of purchasing a property overseas is coming up with the funds. That is yet another reason to acquire a better understanding of the local legal system since you will be at the whim of it. There’s a good chance that you will not be able to finance the property by securing a local mortgage. Even if you manage to do that, the terms may not be as favorable as those in your home state – you’ll most likely have to pay a much higher interest rate, break the bank for the down payment and obtain a new life insurance policy.
If you have a ton of cash just lying around, then you’ll be able to enjoy the best prices and faster-closing deals. And if you, like most folks, do not, then you still have some options. For instance, you may qualify for developer financing or seller financing. You can also borrow on your home equity, tap into the funds from your investment accounts or self-directed IRA. Lastly, you can go for the Classic international home loan. In all cases, for an overseas property transaction, the most important thing is to protect your property rights.
Research the location
Conducting detailed research into your property’s location is a definite must whether you’re an investor or a future resident. Check the things like population, tourism, and economic trends to ensure your international purchase is a sound investment. In case you intend to move therepermanently, scout out the neighborhood for all necessary amenities such as food, health care, and transportation.
Additionally, make sure that the cost of living is lower than that of your current country of residence because, if it’s otherwise, it doesn’t always make much sense to move abroad. For instance, say your country of origin is Kuwait. It makes more sense to move to India than the United States if you intend to permanently leave Kuwait and find a new home elsewhere. On the other hand, if you want to buy a holiday home abroad and not a permanent dwelling, you’ll mostly be absent, and your property vacant for most of the year. That is why you should also think about locating and employing a local property management company for safeguarding your property. They will make sure to pay regular checkups to your residence and, if necessary, take care of cleaning and maintenance.
Come up with an exit strategy
Another crucial thing to remember is that even the best plans sometimes go awry. Therefore, you will need to develop a suitable exit strategy to minimize any risks for financial loss and all other inconveniences. As for those planning to relocate permanently, it might be best to retain strong ties to your home county.
The final word
This will be one of the most significant investments you make in your lifetime, which is why jumping the gun could be a grievous mistake. By putting the tips mentioned above to good use before you finally plan your relocation to your new home with the help of Easy Move KW, you will ensure this turn out a positive experience.
Therefore, before buying a house in another country, what you need to consider is putting together a team of professionals: a real estate attorney, mortgage lender, and a real estate agent to help you get started and familiarized with the foreign market, all legal issues, finance options, and ensure a smooth process of the transaction. Also, don’t forget an interpreter to accompany you in meetings and translate all important documents and contracts. And lastly, you will need a team of movers to get your belongings to your new beautiful home safely.
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