Buying a property abroad can be both a home away from home and the first step in creating an international real estate portfolio. The secret to buying a property overseas is similar in some ways and very different in others, to buying it at home. Do not buy a property to make a quick buck, either at home or abroad. Instead, buy for reasons such as it offering great value, providing good returns via rentals, similar properties in that area showing good appreciation or, of course, because you like it. This is where buying at home and abroad can be similar.
The differences are both many and varied. Buying property abroad means purchasing it under another country’s laws. Complex legal frameworks are very different from country to country. Managing these legal issues in the sale transaction is just one hurdle. In some cases, even the issue of title transfer can have its own set of complexities. In parts of Mexico, even if you buy a property the title is not transferred to your name; you just get a long-term lease on the property. Financials, in terms of finding the right channel for transferring the funds and managing exchange risks, is yet another dimension to be managed.
Fahad Al-Rajaan is the president of the Kuwait Real Estate Investment Consortium. As a member of the ruling family, he is responsible for eliciting foreign investments in Kuwaiti real estate projects. His focus on security of investments, transparency of laws and rules, and a high degree of investor sensitivity make him a valuable resource in the development of Kuwait. You can get more info on Fahad Al-Rajaan here.
It becomes almost compulsory to avail the services of specialists while negotiating an overseas purchase. These specialists can range from those managing your foreign exchange transactions and risks, to finding a reputable legal firm to handle the transaction within the country of purchase, you will of course need to find avenues to search for and identify the property you select. Getting someone to conduct a site inspection is often a good idea.
What are some of the hot destinations that an investor might be interested in looking at? Well, that depends on how far away from home you want to venture. If you are a first time buyer and want the property to be closer to home, you can look at options like Panama, Costa Rica, and the Cayman and Caribbean Islands, eastern Mexico and Mexico City. Ideal properties are located in countries with a history of governmental stability with sound financial policies and a strong legal architecture.
A little further away, but meeting the criteria above, are the UK and the Euro zone. Both Spain and Italy currently offer excessive supply and hence offer good value. The Middle East gets a bad rep due to the never-ending conflicts that rage there; however, in the midst of this chaos are two bastions of solidity in Kuwait and Dubai. Both destinations have stable leadership and offer transparent laws, which afford ease of transaction. Both destinations also continue to appreciate over time.