Top 7 Benefits of Buying Property Abroad
This article explores seven basic reasons why people nurture the dream of owning foreign property
The ebbs and flows of foreign property rules in many countries have caused an influx of foreign buyers into their real estate markets. The current trend is that many countries are more accepting of foreign property buyers, unlike before. In some countries, like Australia, it is becoming a malaise, where the overpowering of foreign currency is causing an affordability crisis for residents. Hopefully, this would balance out soon. But, the fact still remains that more people are drawn to global property. In many cases, when countries have modified their laws to be more accommodating to foreign buyers, there have been real estate boom. The historical constitutional change of Thailand's foreign property laws in 1979 brought an influx of foreign investors and few months later, Thailand began experiencing its first real estate boom.
Motivations For Buying Property Abroad
It's not just about wanting to fulfill the lust for adventure. Recently, there have been an increased number of British buying foreign properties. Many of them buy for many reasons, let's just examine three:
· Cost. Will you buy a house in Britain if you can buy two houses for the same price in Brazil? The principal motivation is pricing. The appeal of buying property abroad lies in the fact that you can buy a home conveniently and still have enough money left to have a whale of a time in your chosen country. For most people, cost is the strong motivation for buying overseas.
· Possibility of an investment. Some property investment hotspots abroad are experiencing influx of foreign buyers. While these areas may not be the first choice for people who want to slash price in half; it is a catch for those who are seeking investment opportunities.
· Second home. A personal reason for buying property abroad is to own a vacation property. For many affluent individuals, having a place, maybe a seaside location in Turkey to retire from the hustle and bustle, is important. With lower cost of living and interesting destinations, expats can live the good life abroad. These vacation properties also offer sound return on investment.
Benefits Of Buying Property Abroad
Broadly speaking, let's take a quick look at the 7 benefits of buying property abroad:
1. Diversify your portfolio.
Buying property abroad is a great way to diversify your portfolio. Having all your investments, stocks and all, in your country of Birth, is like putting your eggs in one basket. Also, you can invest in a hard asset, real estate, which is proven to be more reliable than stocks.
2. Diversify currency. Having all your investments denominated, in your local currency, is also 'putting your eggs in one basket'. You don't want to be at the mercy of the local economy.
3. Reinvent your life. Apart from building your net worth, owning a home abroad is a way to gain a rich cultural diversity and more momentum, especially during retirement.
4. Own a second home. Instead of spending your life savings on a second home, buying a second home abroad can be 5 times cheaper. There could also be a chance to make good vacation rental income as your vacation home increases in value.
5. Retire overseas. You can take advantage of the low cost of living abroad to enjoy your retirement.
6. Tax deductible travel. In the US, the cost of traveling to manage your overseas property is tax-deductible.
7. Earn income. A rental income overseas will generate an income that is not determined by your citizenship country's economy. For instance, rental returns in Medellin, Colombia can be up to 10% and the cost of property ownership there is low.
Buying property abroad is a smart move. But, anybody who wants to take the plunge must be ready to put in work. Don't just expect to sit and wait for your property to grow in value. An investment in real estate requires active and ongoing management.
