Finance

9 Important things to consider before buying an overseas property!

buying an overseas property
Buying an overseas property

In recent time, buying an overseas property has become a popular investment strategy. Large number of population are finding this as a lucrative and attractive option to invest their wealth. 

 One side, it seems like a “dream come true” feeling for many individuals, other side it helps in “Internationally diversification” of your assets. Diversifying your assets internationally offer lots of benefits. It helps in reduce the risk of investments and protect your assets in case of adverse life events.  

Benefits of international diversification of property 

There are many benefits of international diversification of property. Such as:  

  • As a basic factor, diversification of property helps in lowering your risk by spreading your money across foreign companies and markets and in different assets. It helps in minimizing risk of potential capital loss of your investment portfolio.  
  • This thing also helps in supporting your financial condition in adverse conditions. For example, in case when your home country faced any issue regarding economic decline or political instability, it can affect your financial security. In that scenario, your international investment help in secure your wealth and support your financial condition.  
  • You can capture higher expected returns from your investment. It is one of the best way to grow the value of your property faster and get better end results.  
  • It is also one of the best way to protect your saving and good option for preservation of capital (specially in case, when you are close to your retirement days) 
  • This diversification of property helps you in diversify your life in many ways and offer you alternative options for not only investing the money but also create an option of second residence. (Specially, in case you need to leave your own house or country due to any un avoidable reasons.) 

Whatever is the reason or motive behind the buying overseas property, it is a big and important financial decision that requires proper planning and understanding of many rules and regulations.  

If you have a dream or vision of buying a property overseas, then this post will help you to give a detail insight about all important things that need to be considered. 

Sharing 9 important things to considered before buying a property overseas in this post? Read the post to know more! 

9 important things to consider before buying a property overseas! 

buying an overseas property: important things to consider
buying an overseas property: important things to consider

Be clear about your purpose and make a plan accordingly 

be clear about your purpose and make a plan
Be clear about your purpose & make a plan

 Buying an overseas property can have different motive for different people. Some want to utilize this option just as an investment and for internatially diversified their assets, while some may have a dream to spend their old age days in their dream place.  

For making this purchase successful, it is important to be clear about your purpose and motive. This first step will give you a better visibility and idea to how to execute your purchasing plan? With clear motive, it is easier to get professional help and even ask other experienced individuals to get their advice for smooth purchase of overseas property.  

Research thoroughly and set some basic parameters (like your budget, location etc.) 

research properly
Research properly

You might have few options (as different countries or different places in same country) to make your overseas purchase, and each option might sound exciting to you, while you start planning. But on practical aspect, you have to narrow down your option by research thoroughly. You need to finalize a place by keeping all important factors in mind like your budget and cost of living in preferred location.  

Start creating connection with local real estate agents and gather all important information 

contact real estate agent
contact real estate agent

As next step, you have to start making your connection with local estate agent. He is the person that can guide you through all legal integrities and local laws. Try to gather as much as information about the area before taking the important decision of making your big purchase.  

Learn foreign ownership laws 

home ownership law
home ownership laws

This one is another important step before taking big step. Buying a property in different country is completely different process than buying it in your own country. 

 Each country has their own sets of laws and rules, when it comes to allow foreigners to making a property purchase in their country. Some countries may asked you to take a special resident permit before saying yes to your property purchase and some might need other important documentation to complete before allowing to a property purchase.  

You need to understand foreign ownership laws, rules and regulation properly before making property purchase decision. You can take a help of local real estate attorney to understand the process of foreign ownership and transactions.  

Read this post to know more about foreign investment laws. 

Finance 

finance
Finance

Now, move on the next and most important aspect of buying a property overseas and that is “figuring out your finance”. 

Expert suggested, cash is the best option when it comes to buying a property overseas.  it helps you in saving on interest and make overall process fast and easier.  

In case, when you are not in comfortable zone to go through “cash” route, you can opt for other alternative options like bank financing, barrowing money through home equity line of credit, developer financing and seller financing.  

Read this post to know more about 5 ways to finance a home purchase overseas! 

Apart from cash, bank financing is second best financing option for overseas property purchase. But this option has some challenges such as you have to prepare for giving high interest rate and you need to calculate your mortgage carefully.  

You can take help of mortgage calculator to calculate your payment.  

Mortgage calculator help you estimate your monthly mortgage payment. The process of calculating mortgage payment is complex but use of mortgage calculator makes it quick and simpler.  

Look at the screenshot to get an idea about how can you easily calculate your mortgage in no time with this mortgage calculator.  

Here you just need to fill some basic details like your home price amount, deposit and mortgage amount, interest rate % and term (years) and then you can easily calculate full monthly payment, total loan payment and total cost of house.  

Along with this basic mortgage calculator, this website has an amazing collection of other mortgage calculators like mortgage affordability calculatorsmortgage amortization calculatormortgage overpayment calculator and remortgage calculator.  

These calculators offer instant calculation results without requiring page reloads and buyers can instantly compare amortising and interest only payments side-by-side.  

As another unique feature, here you also get an option of graphs of loan repayment along with monthly and yearly amortisation tables. 

Tax liability 

tax liability
Tax liability

Along with foreign ownership, you also need to understand tax lability before making your property purchase. Each country has their own set of rules for tax liability for property purchase. You need to make yourself educated regarding this aspect to avoid any future tax related problems.  

Zoning rules  

If you have plan to use your property as a rental one in future, you need to understand zoning rules of that area. Zoning rules are basically define the criarea how a property can be used in certain area and what are the type of application are allowed for a particular property. Make sure you understand all these aspects, if you have any plan to use your property in some other ways in future.  

Make a plan to safeguard your property, when you are not there 

home security
Home security

This point is extremely important, when you are buying a property as a holiday spot or for as an investment option only. When you did not have any plan to move in that are permanently, then it is important to have a proper plan to safeguard your property, when you are not there.  

You can take help of local property management firm and can install a quality security system to safeguard your property. It might sounds like an extra expense but this is an important aspect to safeguard your property in long run.  

Keep an “Exit strategy” ready 

exit strategy
Exit strategy

Last but not the least, keep an “exit strategy” ready for any adverse situation that may arise in future. Sometimes despite best efforts and planning, things go in wrong direction and may cause a huge financial loss and inconvenience. You need to keep an exit strategy ready for minimizing inconvenience and potential financial loss.  

So, these are some important pointers that you need to considered before buying a property overseas?  

What are your thoughts? Please share with me! 

Read also: https://surbhiprapanna.com/2020/12/28/first-time-home-buyers-try-mortgage-calculators-figure-out-how-much-home-you-can-afford/

22 Comments

  • Ambica Gulati

    While I have never thought of buying a property in foreign lands, your post has got me thinking. Economic safety needs to kept in mind. You have highlighted all the major checkpoints well,

  • Alpana Deo

    Having a property itself is a big thing then when we are talking about overseas then that adds another dimension to the excitement. But along with the excitement, many other responsibilities and aspects comes into picture. And we should be well prepared for any unexpected circumstances. I liked how you mentioned about Exit strategy.

    • Imagemakeover

      Wow… I had no idea when it come to buying property overseas. This Post is such a handy guide for many. Exit strategy and zoning rules are two things I wasn’t aware. Thanks for Sharing such an insightful post.

  • Ruchie

    This is such a well-researched article for all of them who want to buy a home in other country. No wonder, a new home will bring new responsibilities which needs to be understand properly.

    • Dr.Amrita Basu

      Always exit strategy is crucial to know.Some very useful point about investing in international real estate.Many of these are applicable to the domestic marker too .

  • Gunjan Upadhyay

    such a well drafted post Surbhi, I like how you have included all the aspects especially the getting to kno and the security part. I believe those might be the 2 main hindrance people might face and proper research and a good plan could make it easy for sure.

  • Varsh

    Buying home in another country can be confusing since the laws, taxation and areas are new to us. You’ve shared some good tips that one must keep in mind before investing.

  • MeenalSonal

    Buying a property is a very big decision and when we do it we have to do it will complete planning. Liked your pointers that emphasis on thorough research and the mortgage calculator seems helpful in that. And yes as you said in end exit plan should be ready as when we buy property for investment we should look for ways to sale it out understanding all the laws.

    • Humaira

      Liked the pointers that emphasis on thorough research and the mortgage calculator seems helpful in buying property in overseas. Superb tips.

  • Indiacafe24

    Having property and more property is something which we all wish to dream for. Having a single property created immense pressure on me and him… planning for a foreign property is something I will keep on waitlist … But when that golden moment will arrive I will surely recheck your content as I actually liked it

  • Kavita Singh

    Quite a detailed post you have written and I am surely bookmarking it for future purpose. Planning and buying a property in a foreign country is definitely a dream for many.

  • Meenakshi Kaur

    I don’t know either I will or will not going to foreign country but surely it’s a dream. Really liked the way you explained the topic. If I ever get a chance to purchase a property in foreign country will definitely keep these points in my mind.

  • rakshanagaraj

    Such an important topic to discuss. Yes I have a property in foreign country and I know how hard it is to maintain. These are really useful tips to know before considering a property outside.

  • Rahul Prabhakar

    The timing of your post couldn’t have been better! I was thinking of buying a property in South Korea and needed some expert advice on things to be considered before taking the plunge. It must be tedious for anyone trying to invest, without having all the necessary information.

  • aditi

    It’s an important post. Buying property on a foreign land has its pros and cons. The details shared by you will come in handy for those who are buying a property overseas.

  • freemindtree

    Great post indeed. Actually we have never thought of buying a property in foreign land. But your post actually enlightened me and brought this idea to my attention. I am surely putting this idea across and will weigh the pros and cons.

  • Shilpa Garg

    Wow! This made for such an interesting and insightful read. Yes, knowing the rules of the land, taxation, mortgage are key. Also having goal clarity is important… why you want the property in the first place!

  • Hansa Kajaria

    Investing in a foreign country can be a task in hand with so many new laws and regulations and taxation to follow. So a through study and understanding and knowing one’s own financial viability before taking the plunge is necessary.

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