What's Your Real Estate Profile?
It can be very exciting and alluring to purchase International real estate. It can also be lucrative if that’s a route you wish to explore. There are multiple reasons why people purchase International real estate and it’s important for you to know where you fit in. Investment, second home, retirement home or income property are all common motives.
Second Home/Retirement Home
Purchasing a property in a foreign country as a second home or a retirement home is pretty cut and dry. Perhaps you currently live in the northern hemisphere and are simply done with spending winters in the cold and snow. Or maybe your health requires you to spend more time in a warm climate, but you’re not quite ready to leave your northern home permanently. Or, perhaps, like many of our readers, you’ve had an opportunity to buy a lot in an exclusive development that will be waiting for you in 10 years time. Whatever your reason, it doesn’t matter, you’re investing in your future and personal well-being, so go for it!
If you are looking strictly for an investment property, your financial goal will ultimately steer your real estate choices. As well, your current investments and risk tolerance will have a large impact on what type of investor you are and is an important part of becoming involved in the International real estate market.
How experienced you are in the real estate market and how involved you’d like to become are questions you should ask yourself before purchasing a property or properties in a foreign country.
How much real estate experience do you have?
If you’re a new investor, chances are you will be more comfortable with investments that aren’t overly complicated. It’s probably not a great idea to try and develop a real estate project by yourself in a foreign country, where you don’t speak the language or know the laws, as your first endeavor.
However, if you’ve got experience running a business back home and it’s something that would translate well – or better! – In a foreign country, that’s likely a lucrative option to look at. As well, vacation rentals that are managed by a third party are typically easy and safe investments to delve into.
Of course, as you learn the ins and outs of the country and make local contacts, exploring options for more intricate investments will no doubt present themselves.
How involved would you like to be in your investment?
If you have experience investing already – stocks, bonds, real estate, etc – then you know that your level of involvement depends entirely on what you choose to invest in.
For example, perhaps you have the ability to be hands on with your real estate investment, and choose to purchase a quality property and/or home with the intention of flipping it when prices go up. This requires a conscious effort on your part, simply because you will need to continuously observe your area and other home prices in the market to know when to sell.
Alternatively, there are also hands off options available to you. By hiring a dependable property manager, you can step back and leave the organizing up to them. They will ensure your property is rented, maintained and in many cases will even advertise for you to ensure that renters are continuously coming and going. This is certainly ideal, as you are able to visit your piece of paradise when it works for you, but otherwise can sit back and collect your income.
If you are already living in a foreign country and are looking for further investments in your own backyard, options are certainly available to you. Developing property your self, managing a business or restoring an old home or business to live in, work in or sell are all available. It really comes down to the time you’re able to commit to said project in order for it to become worthwhile.
There are many factors to consider when you are determining whether or not to invest in International real estate. Take a close look at yourself and the realistic level of commitment you are able to put forth. When you know what type of investor you are, you’ll have a much better idea of how to narrow your countless options.