If you’re someone who loves to travel, you may have considered buying a property in a foreign country. After all, it can be a great way to have a place to call home base whenever you’re not on the road. Plus, by owning a property in a country where you love to travel, you’ll be able to rent it out when you’re not using it, which can help offset the costs of owning it. However, before you rule out the idea of owning property in another country, there are some things you should consider. Here are some things to think about before buying property abroad!
1. Loans
When it comes to financing your investment abroad, you’ll be faced with two options: purchasing a property with your own savings or receiving an international loan. Obviously, if you have the money to purchase a property outright, there are no monthly repayments involved. However, if your savings can’t cover the cost of buying a home abroad outright, you should consider applying for loans or other financing options first. But, keep in mind that many countries have some restrictions when it comes to loans. You should check New Zealand’s LVR restrictions, Europe’s mortgage loan regulations, and Australia’s lending rules to find out about their particular regulations regarding mortgage loans. Once you know whether or not you can get a loan you should consider purchasing a home with your own savings.
2. Taxes
Wait! You didn’t think you could buy a property in another country without paying taxes, did you? Unfortunately, many countries have higher rates for foreigners than for citizens. Keep this in mind before you decide to buy a house abroad, as the taxes you pay on your property may be higher than what someone who was born there would have to pay. However, don’t let high taxes dissuade you from buying a home in another country entirely. The governments of these countries place high taxes on properties because they want to discourage foreign investors from putting their homes on the market. If you’re looking at buying a property in another country as an investment, you should be more concerned with how much the home will appreciate (or depreciate) than what your initial taxes may be.
3. Insurance
Property insurance may also be another thing to consider before buying a home in a country you love traveling to. There’s no guarantee that insurers will cover your property abroad, especially if it has been there for less than five years. Most policies require new homes to be occupied and insured within six months of the purchase date for you to receive coverage. Once that home has been occupied for six months, you may be able to renegotiate your policy to include it. However, if you want to purchase a property abroad without adequate coverage from the get-go, don’t say we didn’t warn you when something does go wrong!
4. Other Costs
Keep in mind that other things will have to be taken into consideration before you can purchase a home in another country. For example, keep on top of taxes on land that is vacant or unoccupied. You’ll also have to pay estate agents’ fees for finding and negotiating the best possible deal, as well as your solicitor’s fee for drawing up the legal documents. And don’t forget about your lawyer’s fee, either. You may even have to pay a commission for the transfer of ownership from the previous owner to you. When it comes to buying a property in another country, there are many things that need to be taken into consideration before you sign on the dotted line!
5. Location
Now, let’s move on to some nicer topics, like location! When it comes to traveling abroad, you might not want to buy a property in the same place that most tourists would choose. You can find a home in a unique location that you know you’ll love, but it may require some more legwork to find. However, if you don’t mind commuting to work or running daily errands, then buying a property in an area that’s already developed can save you money and reduce costs. Plus, the location of your property will affect your insurance premiums, taxes, and estate agents’ fees. If you want to save money on those costs, make sure that the location of your new home is convenient for daily living before buying it.
Buying a property in another country can be an excellent investment, especially if you’re someone who loves to travel. There are many benefits to owning a property in another country, but you should be aware of loan requirements, taxes, insurance policies, and other costs before buying a home abroad. Location is also very important when you’re considering where to buy your next home, so keep that in mind when you’re deciding where to buy a new property!
