Investing in real estate abroad: tips to increase profits, advantages and disadvantages of investing

Such an investment option as buying real estate abroad, despite the risk, has recently become increasingly popular.

27 april 2019

Such an investment option as buying real estate abroad, despite the risk, has recently become increasingly popular. Of course, when investing in currencies or stocks, you can get rid of an asset much faster and easier than selling, for example, a villa in Spain, but apart from the growth in real estate capitalization, owners can receive a considerable rent by renting out the area for long-term rent. In this article, we will analyze all the pros and cons of investing in real estate abroad, as well as determine how you can maximize the profit from such an investment.

Advantages and Disadvantages of Investing in Overseas Property

First, let’s figure out what attracts investors:

– The presence of passive income from renting out housing in developed or tourist countries is much higher than renting a property of comparable value in the CIS countries;

– Now the cost of housing in the EU countries, even in the resort area, is lower than the cost of housing in most regional centers of Russia and Ukraine. At the same time, the surrounding infrastructure, and the standard of living, in Europe surpasses ours;

– Even without renting out the purchased housing, but using it for personal purposes, we get a stable growth of real estate capitalization of 2-5% per year, depending on the chosen country. The very possibility of using real estate for living for personal purposes is also a huge plus;

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– Minimal risks. If you have chosen a calm developed country for investment, then if you have insurance, the risks are practically reduced to zero;

What pitfalls can an investor expect? Let’s figure out the cons:

– The complexity of the procedure for buying and registering real estate, paperwork;

– The need to understand the legislation of a foreign country;

– Choosing a suitable object, the need to travel abroad for a personal inspection of the building;

– the need to declare real estate abroad, attracting unnecessary attention to the tax authorities;

– In addition to the costs of acquiring real estate, you will have to pay local taxes and fees when making a deal.

Tips on how to profitably buy property abroad and make money

Let’s figure out the details of the purchase itself, so as not to burn out and not overpay extra money.

– Use the services of only reliable companies for the sale of real estate abroad. Here for example you can buy apartments in Phuket, Koh Samui and Bali;

– Buying housing for labor migrants in the Czech Republic or Poland will bring much more profit than renting out rest rooms on the seashore;

– When choosing apartments for renting out to tourists, keep in mind that buying housing in tourist Croatia or Montenegro can cost 5 times cheaper than in Greece or France.

– Not always a low price guarantees a profitable investment. In addition to the cost of the building, you will have to make a lot of other payments: taxes, fees, intermediary fees. All of these payments can be up to half the cost of an inexpensive villa;

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– Do not trust the seller’s calculations of the rental yield. Basically, the profit on them is exaggerated, and such calculations do not take into account many factors, such as manager’s fee, insurance, downtime, etc.;

– If you want to make money on renting out housing, it is better to choose objects for long-term rent and discard investment options in cities where profits are seasonal;

– Study the legislation of the country not only from the side of buying real estate, but also from the side of ensuring the rights of tenants. It may not be easy to break the lease;

– If you yourself will not reside permanently, be sure to find an honest manager who you can trust.

– Choose countries with the highest housing liquidity for investments, for example, the states of Western Europe. Here, if necessary, it will be possible to find buyers quickly and without great losses.

Successful investment to everyone, share your advice in the comments, and we will definitely add it to their article.

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