Buying a Property Abroad Tips for Investors Entering the Foreign Property Market for the First Time

20230526052825_64704379e6848.webp

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.

Previous Post

How Much Should I expect To Pay in Stamp Duty Fees When Buying Foreign Property?

Next Post

3 Tips to Secure Financing for Foreign Property as a Boomerang Home Buyer in the US

Related Posts

20230526050756_64703eacd86e9.webp

5 cities with the highest cross border real estate activity in 2018

  • 26, October 2023

Asian investors are the largest group snapping up foreign property according to research. But in which cities are they investing? And why?

 

As more people's attention is being drawn to real estate as an asset class, a larger number of people are seeking out foreign property. 2017 saw a large number of Asian investors enter the market sweeping up properties from the US to Canada straight to France. Recently, contrary to expectations, their attention is being drawn to residential and commercial properties in London, UK.

 

Propertywire's first quarter of 2018 stats https://www.propertywire.com/news/global-news/londons-commercial-property-market-top-draw-international-buyers/ reveal that overall about 5.6 billion pounds of foreign money was invested in London, with Asian investors contributing about 4.4 billion pounds or 65% of the total investments. The next highest was Hong Kong at 5 billion with Paris following from behind at 1.9 billion pounds.

 

If you're looking to invest in real estate, one of the major factors you would need to consider is liquidity. Based on liquidity, these are the top performing cities for cross-border real estate investing in 2018. This is indirectly influenced by population growth, employment growth and usually followed by an increase in home values or strong rental yield. 

 

•   New York, USA: Brooklyn and Manhattan are two of New York's favorite hot spots for foreign real estate investors. The activity of Chinese, Russian and Middle Eastern real estate investors, paying cash on high-end properties has consistently driven New York City’s real estate price upwards. With a population growth that hasn't slowed down, New York City real estate not only offers liquidity but stability for real estate investors.

 

•   London, UK: Despite Brexit, London leads the way as a favorite for foreign real estate capital. In the aftermath of Brexit, the attention to both London's commercial and residential real estate has been largely driven by a weaker pound and more affordable housing. Foreign real estate activity in London is largely funded by equity funds, institutional investments, and private capital. Units in the mid-range segments have been most popular among buyers. Presently, though, the government is setting tax constraints on foreign real estate investing as the cost of home ownership increases.

 

•    Hong Kong, China: In 2017, Hong Kong was named the "most luxurious" prime housing market for the second year running by Christie's real estate https://www.christiesrealestate.com/eng/sales/hkg . Hong Kong's housing market has shown little cooling with 4.4 billion pounds of foreign money spent by foreign investors in 2018 first quarter. The heated market in Hong Kong, as experts pinpointed, is a major reason for increased residential housing prices all through China.

 

•    Paris, France: The French economy is seeing a boom with the number of foreign investment activity reaching a 10 year high last year. The French economy exceeded expectations with a 2.2% growth, a large number of jobs created and strong real estate activity. Also with fairly stable mortgage rates, many investors are picking up properties in Paris and Bordeaux. Beyond 2018, analysts speculate the South of France will experience a strong housing demand.

 

•    Los Angeles, CA: Los Angeles may soon replace Hong Kong as the no 1 most expensive city for expats. Currently, the average price of a luxury property in Los Angeles is $2.5 million. With population growth, increasing disposable income and a thriving tech sector, Los Angeles real estate offer stability and liquidity for investors. However, housing is in short supply. A situation leading to soaring house prices. With population growth and a great economy, Los Angeles is a great option for single-family investors seeking high rental yield.

By Bebuzee Admin Read More
20230526050434_64703de24d9ed.webp

2023 Housing Market Correction: Forecast for the Rest of the Year

  • 09, January 2024

If you're in the market to buy or sell a home in 2023, you may be wondering what the forecast is for the housing market. With predictions of a housing market correction on the horizon, it's important to stay informed on the latest trends and predictions.

In this article, we'll dive into the 2023 housing market correction: forecast for the rest of the year. From what's causing the correction to how it will impact buyers and sellers, we've got you covered.

Introduction

The housing market has been booming for the past few years, with low interest rates and a high demand for homes driving up prices. However, experts are predicting that the market will experience a correction in 2023, which could have significant impacts on the real estate industry.

2023 Housing Market Correction: Forecast for the Rest of the Year

The housing market correction in 2023 is expected to be driven by a combination of factors, including rising interest rates and an oversupply of housing inventory. As interest rates rise, it will become more expensive for buyers to take out mortgages, which could lead to a decrease in demand for homes.

Additionally, there has been a surplus of housing inventory in certain markets, which could lead to a decrease in home values as sellers compete to sell their properties. This oversupply of inventory could be attributed to a combination of factors, including a decrease in immigration and an increase in new home construction.

Overall, the 2023 housing market correction is expected to lead to a decrease in home values and a decrease in demand for homes, which could impact both buyers and sellers.

How the Housing Market Correction Will Impact Buyers and Sellers

For buyers, the 2023 housing market correction could mean lower home prices and less competition. As home values decrease, it may become more affordable for buyers to purchase a home, and there may be fewer bidding wars and multiple offers.

However, buyers may also face higher interest rates, which could make it more expensive to take out a mortgage. This could impact the overall affordability of buying a home, and buyers may need to adjust their budgets accordingly.

For sellers, the 2023 housing market correction could mean lower home values and an oversupply of inventory. This could make it more difficult to sell a home, as sellers may need to compete with other properties on the market. However, sellers may also benefit from lower interest rates, which could make it more attractive for buyers to take out a mortgage.

Overall, the 2023 housing market correction is expected to impact both buyers and sellers, and it's important for both parties to stay informed on the latest trends and predictions.

Top 10 Housing Market Trends for 2023

While the 2023 housing market correction is expected to have a significant impact on the industry, there are other trends and predictions to keep an eye on. Here are the top 10 housing market trends for 2023:

  1. Interest rates will continue to rise, impacting affordability for buyers.
  2. The oversupply of housing inventory will continue in certain markets.
  3. Home values will decrease, making it more affordable for buyers.
  4. The demand for single-family homes will continue to increase.
  5. The rental market will remain strong, with high demand and low vacancy rates.
  6. Technology will play a larger role in the real estate industry, with more online tools and virtual tours.
  7. Sustainable and energy-efficient homes will become more popular among buyers.
  8. Cities with lower cost of living and job opportunities will see an increase in population growth.
  9. Luxury home sales will remain strong, with high demand from wealthy buyers.
  10. The real estate industry will continue to face challenges with affordability and accessibility.

ALSO READ: Home values will decrease, making it more affordable for buyers.

By Bebuzee Admin Read More
20230526052151_647041ef56a71.webp

Buying Foreign Property 5 Effective Ways to Make Your Offer Stand Out

  • 28, July 2023

In a seller's market, like the US, buyers must be prepared to do some ground work and move fast whenever they spot homes that offer what they are looking for. In a competitive market, a buyer with cash doesn't necessarily win these days. 2015 Realtytrac stats say that about a third of property buyers in the US are cash buyers. Cash might still have an advantage over mortgage but below are some more tips to create a winning offer.

Only a few sellers can reject an offer of cash but chances are you're not the only one bringing cash to the table. Hence you need other strategies when making a home offer:

1. Move fast.

Moving fast could help you win when making a home offer in a competitive market. If you’re dealing with a seller who doesn't have much time (who does?) and wants to sell fast, all you need to do is put your best foot forward and follow other steps in these article to seal the deal.

You can also offer to close quickly. A standard closing period is about 30 days. If you can close in three weeks instead, this could convince the seller to accept your offer even over one that offers more money.

2. Get a professional.

A proactive and knowledgeable agent will know what works in that community and will be able to create a winning offer fast.  A good agent will be the strongest weapon in your arsenal when in a competitive market. A knowledgeable agent will guide you through winning strategies in that competitive market that may seem crazy when you try them in a slower market.

3. Be human.

Display personality with your offer. One way to do this is by writing a letter to the seller that tells him the reason why you want to buy. Indicate a subtle feature you like about the house (which other buyers didn't notice). Other sellers will appear impersonal.

4. An earnest deposit

A substantial first deposit makes a major difference. A reasonable first deposit will be about 3% of the value of the house. A seller often takes this offer seriously and can feel positive you are focused on the stand by position this offer.

This may give you a winning edge. Submitting a pre-approval notice with the first deposit puts your offer before others by telling the owner you are serious.

 

 

 

5. Money talks.

Of course, the more money you can offer upfront, the better your chances. If you can afford a 30% or 40% down payment (or more), sellers will be tempted to accept your offer. And, in the long run, it will save you money on a mortgage, shortening the length of your loan and the interest you pay. You can also waive some contingencies, depending on what your agent approves.

These tips can put your offer on top of the pile. However, in a competitive market, beating the competition depends on your creativity. 

By Bebuzee Admin Read More