8 Important Factors to Consider when Investing in Real Estate Abroad

1. Knowledge is Power

Knowledge is the first thing you need to equip yourself with, of course, learning may take time, but at least arm yourself with the basic information first, and learn as you go. You can learn by reading books on real estate investments by authors in that particular country, attend seminars, take real estate courses or even get mentors who can provide valuable information. Get to understand which real estate investment is booming, get to know which phase of the real estate life cycle the market is currently in and how the market is performing.

When it comes to knowledge, a real estate investor in America I spoke to admitted that information is not readily available and so you have to dig deep

2. Location, Location, Location

Which are the best countries for real estate investments? Which exact locations have high returns and why? You certainly can’t go fishing in a desert. You need to be very specific with the location and carry out a reconnaissance first before making any commitments. When choosing the location, look out for the population growth, the political atmosphere of the country, the growth in tourism and economic growth. You can also consider the fast-growing cities in the world. For example, most investors are currently focused on Dubai.

3. Cultural Aspects

“When in Rome…” Culture has a major impact on our lives, it is the guiding principle in all we do, so, when it comes to investing abroad, one has no choice but to learn and try using it to an advantage. For example, in some countries, people only have small families of two children or less and in some, people prefer buying housing to renting. Such cultural aspects will enable the investor to satisfy the needs accordingly.

4. Niche

There are many real estate opportunities and options all over the world but you have to be specific. Being able to focus on a particular niche will gain you maximum profits and make you earn a name in the specific area you invest in.    

5. Finances

When it comes to finances, first, you should not put all your eggs in one basket, and second, you need to have a financial plan. It is not wise to spend all your money on a single investment. Setting a budget and sticking to it will guide you in choosing an investment that suits your financial muscle. Fraudsters are all over the world, try not to show that you have a lot of money to spend

6. Ownership and Tax Laws

It can be really hard to invest in a country that does not allow foreigners to acquire property under their own names. Even though there are other ways to invest without actually owning property, owning land is the best. In some countries like Thailand, you cannot own land as a foreigner. You also need to have an understanding of the tax laws. Will you be able to pay tax easily? In some cases, foreigners are charged extremely high-interest rates on mortgages while in some countries, foreigners are charged a considerable amount of interest.

7. Start Small

For the first-time investor, you have to take things slow as you learn and experiment. Most real estate investments require lots of money to begin with, but some investments like Real Estate Investment Trusts (REITs) will allow you to begin with little cash. You can also consider creative financing options and grow your way into real estate investing.  

8. Partner with other People

The investor I mentioned above actually began with creative financing, and now that he has learnt a lot and grown in his investments, he partners with other people on some projects, he says that partnerships are good but only if you find the right people.  

You can choose to partner with the locals of the country you are investing in or your fellow countrymen who have been in business or other people whom you trust. Partnering could ease the financial burden and the workload but it’s a risk of its own kind.