This article offers practical steps on funding a foreign real estate purchase with equity funds.

Foreign real estate presents mouthwatering deals for investors with steep currency differences, especially in today's unstable financial markets; meaning you could have the upper negotiating edge in a neighboring country. The perk in currency strength is however not compensated for by the financial and legal aspects of sourcing funds for foreign real estate investing.

One financing approach which is gradually gaining traction is the use of equity funds. In this case, deploying liquidity of stocks and securities in foreign real estate capital.

There are four approaches you can take when planning to go this route:

1. Employ Equity REITs: Odds are you've heard about REITs and the huge tax rates at the individual investor level. A REIT is generally a stock that invests in real estate or real estate related securities, like mortgages. A mortgage REIT primarily lends cash to real estate buyers or acquires their existing mortgages. An equity REIT acquires, manages, builds, renovates and sells real estate, mostly commercial real estate.

If you don't want to be in the front line and would prefer to play it safe, REITs present a great way to achieve diversification via liquid investment in real estate. Many international REITs have sprung up over the years. So, investing in foreign real estate should be as simple as locating a good REIT that invests in your country of choice or simply using REIT ETFs. However, don't ignore the fact that REITs come with tax liabilities that can range from 15% to 35% of profit. This is compensated for in a way by tax exemption at the corporate level, as long as 90% of income is distributed to unitholders.

2. Self-directed IRA or Offshore IRA: As much as we wish to help you with country-specific information, you should know that real estate laws aren't invariably the same in any two countries. Hence the importance of having a local mortgage expert or real estate agent (read how to find the right local real estate agent) who can help you with local professional information.

For US residents, using funds from your retirement account or 401k is a great way to employ equity funds for foreign investing. The IRS doesn't restrict holding real estate with your IRA. However, according to an article on Supermoney.com, (https://www.supermoney.com/2017/04/finance-overseas-property/), you won't be able to live in the property until you reach retirement age. In any case, you will need to either set up a self-directed IRA, which allows you to invest in overseas real estate via a third party or broker. Alternatively, you can set up an offshore IRA as a way to gain more control, by taking your self-directed IRA offshore. In this case, you move your self-directed IRA into an offshore Limited Liability company. Setting up an offshore IRA can, however, be costly.

3. Stock Market Liquidity: You can employ liquidity on your stock market investment or securities, subject to tax, by selling your holdings. This presents you with cash to invest directly in foreign real estate.

4. HELOC (Home Equity Line of Credit): For home buyers in countries like the USA and Australia, a HELOC allows you to take a loan on an existing home by cashing on real estate equity.

Buying real estate with equity funds is completely legal and carries no extra charges or taxes. However, ensure you report financial proceedings to necessary financial authorities in your home country.

Also, if you're either buying overseas real estate for investment or personal use, reach out to a local real estate agent that can offer market-specific information about taxes for your destination country.

It's easy to see why many people dream of buying a property abroad. You can retire on a sea front property or a beach house on one of the popular European costs. Some people have a lifetime dream of living in an alluring resort villa abroad.

As a traveler, it's easy to fall in love with a particular place so much that you develop an ambition to buy a house or an apartment there. If your job requires travelling a lot and you have the means and the courage to buy a property in one of the cities you frequent, why not? This would be a home you can return to on your next business trip.

You can also make a living off renting out foreign property. If you have an investment unit in a tourist location, you'll be getting big returns. This becomes more profitable as currency exchange rates tip in your favor. Exploring foreign housing opportunities is good but here are some things to consider if you're going in for the first time.

Factors You Need To Consider When Buying a Property abroad

1. Purpose of Purchase and exit strategy.

Why are you buying property abroad? Whether you're buying to live in it, for future retirement, for a family member who might be living or working there, perhaps to rent out or to resell at a higher rate, going in with a clear purpose will give you direction and keep things in perspective.

Having an exit strategy is also important. If things don't go as planned, what are the prospects of selling? Knowing your exit strategy before you make a purchase is key. You need to check the attractiveness of the location and the expected demand for housing as well as any renting or selling restriction on foreign property.

2. Growth prospects of the location's economy

You'll want to purchase a house that is situated where there are flourishing businesses or there are forthcoming growth potentials.

3. Land Regulations.

Unlike the purchase of local property, buying a house abroad is not so simple. This is because the laws of foreign ownership differ from country to country. Foreign buyers tend to have more hoops to jump through the purchase of land and face a more complicated buying process.

4. Potential Property Performance.

Any person buying a property abroad expects to earn from their investment. Before signing any agreement, be sure to ask for evidence to substantiate the projected returns, either through supporting investment reports or external surveys from credible sources.

Tips for New Foreign Property Buyers

1. Thoroughly research the market.

Although global trends in property prices occur, real estate markets in different countries will likely go through separate cycles of rise and falls. If real estate values ??are increasing in London, that doesn’t mean that they are also increasing in Italy or Spain. For those who buy to invest, it is important to pay attention to these trends - the ideal is to buy near the bottom and sell close to the top of a cycle.

2. Use a real estate agent.

Buying directly from an owner can sometimes be a big deal. However, if you are not familiar with the foreign real estate market or struggle with the local language, buying through a real estate agent or a reputable real estate developer can provide a useful guide and help you avoid a number of pitfalls.

3. Have your documents translated.

Before signing any documents related to a potential purchase, make sure that you have translated them professionally. It is essential that you understand any document you will be signing.

With delightful sights and enticing cuisine, it's no wonder France is at the top of the list for many tourists. And not only tourists, people who are banking on profiting from these fascinations are snapping up properties fast too. France also boasts collections from masters of both modern and contemporary art.

However, if you're looking to buy a home in France as a foreign investor, don't be distracted by the sights. It's easy to be carried away by the beaches of Riveira, wandering through the battlefields of Normandy or viewing castles along the French countryside. You will need to focus your efforts on getting the deal done right. Let’s consider some stats on French property prices.

Facts about property prices in France

Prices are competitive and mortgage rates are currently low in France, according to Notaires de France. In the past year, over 900,000 properties have changed hands. Even though a surprisingly large number of these properties (90%) were bought by people looking to live in, rather than let. For investors, this means there hasn't been a property bubble and this might just be the right time to buy a house in France. Price is increasing steadily. Notaires de France estimated a year on year increase of 1.2% in property prices by August of this year and a jump of 4% in property prices by the end of the year.

What to know when buying property in France

Although the process of buying property in France is fairly straightforward, here are some things you need to know:

1. You're not required to hire a solicitor. As a general rule, buying property in France must proceed without an advocator or solicitor. It can't be delegated. So you have to travel and spend time and effort on acquiring the property.  Although property buying and land registration in France are secure, you need to have your wits about you.

2. You should learn French. If buying a house in France, you should know French or at least hire a translator. Trying to infer what the other person is saying will only give you a false sense of security. On the other hand, a knowledge of the language will bolster your confidence.

3. The notaire will not verify everything. The notaire may not be able to tell you if the property would give good ROI or what liens are currently on the property. There is room for you to do your own research about the property and about prices in that neighborhood. It's also advisable to get a specialist property lawyer.

4. Estate agents mostly act for the seller. Take care to read through any written offer. Make sure that the content of the offer are subject to a written sales and purchase offer. Also make sure you read through the content of the sales and purchase offer prepared by the agent to ensure equity. As with buying property anywhere, take your time before signing on the dotted line.

5. Local mortgages can be favorable. You might want to consider buying with a French mortgage as mortgages in France are relatively cheap. If you'll be seeking a mortgage, it's important you throw in a conditional clause in the sale contract.

In conclusion, having your own notaire is advisable. Don't expect the notaire working for both seller and buyer to seek your best interest.