Don’t Buy Property Abroad without Considering These Things First

The prospect of owning a portfolio of properties in other countries is tempting. In many nations, it’s easy to snap up houses or apartments for much less than at home. Whether you flip them and sell them on or rent them out, you could widen your potential for profit by looking at international markets. But it’s not as simple as buying property at home, and there are several things you’ll need to consider before making any moves. If you’re considering buying property abroad, you should take into account many things like where to buy. You need to know which countries you need to pay taxes in and how you’ll manage the property when you don’t live nearby.

Where to Buy?

You need to think about the best country to buy property in, which might depend on your reasons for the purchase. You might have an affinity for a particular country already and be looking for a long term investment that will cover mortgage costs. If you’re looking for property that will give you the biggest return, you’ll need to research the market in different places to find out where you can have success. It’s essential that you check that foreign nationals are allowed to buy property, as it isn’t legal in several countries.

Paying Taxes

You will need to establish where you need to pay tax on the income you receive from your property portfolio. You may need to pay in both your country of residence and in the country where you own property. Some nations might base their rules on how long you spend in the country each year. However, most will tax any property owners. You can also consider how owning the property might affect your tax at home, for example if you count a holiday home as a second home or primary residence. Make sure you check where you need to pay tax on your foreign income and when you can claim it back so that you don’t pay twice.

Currency Exchange Costs

Currency exchange can end up being a significant cost, whether you’re buying and selling property or renting it out. Rather than only relying on your bank, you should look at other options for transferring money to make sure you don’t lose out. You can use currency exchange brokers who can help you find the best currency rates. If you aren’t careful about finding the best rates and fees, you could end up spending a lot more than you need to and losing significant profits.

Property Management

If you’ll be renting out property in another country, whether as a holiday home or permanent residence, you’ll need to make arrangements to manage it. You won’t be there as a landlord to perform maintenance or greet visitors, so someone else will need to do so. You’ll have to factor in the cost of using a property management service or perhaps hiring a host to get guests settled in. Holiday homes also need to be cleaned every time someone leaves.

There are some fantastic investment opportunities in foreign property, but there are lots of things to think about before investing. Take your time considering the unique issues before you decide to do anything.

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