The Dos And Don'ts In Overseas Property Investment
We still don’t know quite when the world will go back to normal, if ever. Most people speak about the ‘new normal’, but it’s difficult to say exactly what that is. However, if that has been putting you off overseas property investment, it should do so no longer.
Globalisation is something that has persisted through economic crises and increased nationalist fervour. People who thought that COVID-19 would bring an end to it were proven wrong early on when it became clearer than ever that physical presence is unnecessary for people to work together.
With this in mind, you may be ready to invest your capital in international property. Here are some of the dos and don’ts in overseas property investment.
Do: Buy for yourself
You may be investing in international property for a number of reasons. Making money might be the primary driver of your decision. However, don’t let this prevent you from keeping yourself in mind.
Ultimately, owning international property can grow your wealth, giving you assets in a number of different economies and sociopolitical climates. But it does not hurt for it to have value even during the off-season or when travel is restricted. Think about what you want before you invest in international property. This could end up being your future home.
Don’t: Ignore politics
When purchasing overseas property, don’t look at your investment in isolation. Take some time to get acquainted with the local political landscape. Politics can turn a good investment into a dud. Even in a relatively stable place like the UK, politics have caused many property owners to look for new avenues for making money.
In a country with major instability, political upheaval can make your investment totally useless. This is especially true if you are from a minority group that may be persecuted by the government of the country.
Do: Research local insurance
Insurance is something that differs in every country. But not everyone is aware of just how different it can be. People from the US particularly struggle to understand the more regulated insurance industries around the world.
Insurance is going to be one of your most consistent expenses and administrative tasks. Take some time researching the rules and regulations that govern insurance in the country you are purchasing property. This becomes even more pertinent if you are buying in a place with natural disasters like earthquakes and volcanoes.
Don’t: Buy with friends
We’ve all had those late night conversations with friends where we dreamed about buying international property together. It would give us a joined source of income, as well as a place to vacation together or one at a time. However, it may not be the best idea.
Technically, there is nothing wrong with investing in international property with friends. But it does create complications. You are not simply making plans together. You are essentially going into business, and this can destroy a friendship. You'll end up arguing over who does the administrative work, whether they get paid, when you can individually use it, and so much more.
Do: Meet the neighbours
You can own international property without ever seeing it in person. It may even be in a country you have never visited. But that doesn’t mean you should ignore your neighbours.
Either make a plan to meet them virtually or get your caretaker in the location to do so for you. Your neighbours will be able to tell you all about the various issues you might face in the area. If you have a good relationship with them, they will have your back in a crisis. They will also be willing to go easier on noisy or disruptive tenants.
Don’t: Consider the investment as passive income
Owning property is often considered a form of passive income. But that is deceptive, especially when it comes to overseas property. You are going to need to spend a lot of time on admin, including repairs, maintenance, cleaning, and liaising with renters.
It will take time, even if you have a great caretaker in-country. There will be bureaucratic issues as well, which only you will have the ability to take care of.
Owning international property is a great way of diversifying your income sources as well as giving you a potential place to live. Now is a good time to invest, even with the continuing pandemic.