Due to the coronavirus pandemic, the previous year has taught us many lessons. Unfortunately, we had to learn some of them the hard way. Home offices have become a trend that many are now considering, and second homes have become a popular way to escape the routine of staying at in one place. With the real estate market being strong, many have chosen to pull the trigger and go house hunting. If you are feeling adventurous, you might even consider purchasing property abroad. After all, there are many benefits to owning property in another country, and we are here to give you the ultimate guide to buying land overseas.
Why purchase internationally
Reasons for wanting to own land overseas can be diverse. You might want to have a personal getaway on a secluded beach, or perhaps you would like to have a financial foothold in a developing region. It can also be as simple as wanting to diversify your assets. On the other hand, some people are looking into buying a property in a country where the cost of living is low, which will allow them to set up a comfy retirement. Maybe you have a job that can be done remotely and just want to travel – it’s still good to have a base of operations.
How to fund an international property purchase
Being a US citizen means you will probably have a hard time getting a local mortgage. Even in places where getting a mortgage is possible, you will likely be facing high interest rates. However, there are still a few ways to finance your purchase:
- Developer financing. This option may be available to you if you are looking to buy property in development or a home site to begin construction. Obviously, you will want to find experts to deal with this project, and we recommend hiring a contractor.
- Paying in cash. Although cash can allow you to move faster when you see an opportunity you like, we would still advise being cautious. Try to avoid paying large sums of cash up-front for a property that is still in development. Some projects can run into problems, or developers can just lose their funding.
- Self-directed individual retirement account. An IRA can allow alternative investments for your retirement savings, and real estate is one of the more popular options. You will need to treat the property as an investment, meaning you can’t live or vacation there.
Best places to buy land
Due to the high standard of living in the US, many locations are viable options for purchasing property overseas. In many places, land tends to be cheap, and the associated costs of developing property are also fairly low. Here are some of the most popular and sought after destinations for buying property overseas:
- Belize – located in the Caribbean just off the northeastern coast of Central America. A popular tourist destination for Americans since English is an official language.
- Mexico – probably the most popular retirement destination for both Americans and Canadians, Mexico is also a great place for investment property due to it being a tourist hotspot as well.
- France – it makes sense to invest in an ever-popular tourist destination, especially when considering the low interest rates that are available to foreigners. The diversity of France’s regions will allow everyone to find the perfect property for them – from secluded rural countrysides to bustling Parisian neighborhoods.
- Malaysia – property prices are significantly lower here than in Singapore, English is widely spoken, and foreigners can purchase land. There are certain conditions for buying and selling property, but they are generally favorable to foreigners, making Malaysia’s real estate market on the rise.
- Portugal – although it has been gaining interest in recent years, Portugal is still somewhat of a hidden gem. Both property prices and the cost of living are low, and there are plenty of options to snag a cheap fixer-upper. High rental yields compared to low real estate prices make Portugal a great place for an investment property.
Get informed about the country before you even set foot there. Do as much research as you can. What is the coronavirus situation there, and do you need any additional shots for diseases like yellow fever?
If you are reading this guide to buying land overseas because you are planning to relocate internationally, you need to be extra sure you have everything running smoothly when you move. You definitely won’t be alone since there are estimated to be 9 million US expats living worldwide. Ask other foreigners for help and advice.
Once you have chosen your ideal location and plan to purchase land overseas, you will probably want to start developing on it soon. Even before going overseas, we recommend consulting with Top Rated General Contractors LA to check on the feasibility and potential costs of any future project you may have.
Hire professionals that are local to the area even before you purchase. Having a local attorney will ensure you don’t mess up on any paperwork. It’s also advisable to have a local buyer’s agent as someone who will be on your side of the negotiation process. These skilled professionals can help and guide you when buying land overseas.
Read up on local laws and regulations. Most people get caught up in researching their purchase options, but it’s also good to know the law regarding sale as well since you will want to know about your exit strategy. For example, if a foreigner sells land in Malaysia, the funds must be kept in a Malaysian bank account.
Whatever your reasons for wanting to purchase property abroad, we have covered the dos and don’ts in this ultimate guide to buying land overseas. Buying any property is always a large commitment, but purchasing overseas comes with its own risks and challenges. Make sure you are aware of all of the associated costs and have a well-planned way out in case you decide to sell the property you have purchased.