If you're like many other world travelers, you've probably daydreamed about owning your property in a foreign country. Buying property abroad isn't an unreasonable dream; proper planning and research go a long way. However, there are many potential pitfalls in buying real estate abroad, which would never occur to someone in the U.S.
Every country has its own customs and laws to navigate. In some countries, it can be just as easy to purchase property as it is in the U.S.; in others, it simply isn't possible at all. The purchase of your new home isn't something to take lightly. There's potentially a lot to lose if you run into any obstacles. Review these guidelines on buying property overseas before getting started.
1Understand The Big Picture
Purchasing real estate in another country isn't a minor undertaking. However, many U.S. citizens have found numerous advantages to buying real estate and living overseas. It's important to investigate all the laws associated with owning real estate in your target country. Laws vary tremendously!
Some countries have laws against foreign ownership of the real estate. Other countries permit ownership of land improvements or structures, but not ownership of the land itself. Understand the financial picture of your potential new country. What's likely to happen to your property values in the future?
Is your new country safe and politically stable? Do your research. The U.S. state department website can provide some insight.
2Seek Assistance When Necessary
Consider hiring an attorney and a real estate broker in the country where you're interested in purchasing a property. Did you know you can buy property in Malaysia, but when you sell the home, the money from the sale must stay in the country? Experts would know and can help you with these technicalities.
3You Might Have To Pay With Cash
Buying a property overseas may require you to pay in cash. Many countries lack financing options commonly available in the U.S. Even if you're able to find a mortgage, you'll likely be required to have a down payment of 40% or more.
4Making A Bribe
Have you ever made a bribe? While bribes are frowned upon in the States, it can be a common business practice in other parts of the world. Your overseas real estate agent will know the ins and outs of bribes in your country of choice.
The good news is the bribes are usually quite low. The $100 range is common. It might only be needed to speed things along. In fact, bribes might be required!
5Be Aware Of Property Taxes
Be aware of property taxes when buying a property overseas. Property taxes are required in some countries and not in others. Some places even have a special tax rate for foreign property owners.
6Titles Aren't As Clean In Some Countries
Titles aren't as certain in many other countries. In the U.S., you get a title and purchase title insurance. The situation frequently isn't as clean in other countries. Ensure you're well protected. In many other countries, a notary also does the equivalent of a title search, so use a notary if necessary.
7Think Of What Will Happen Upon Death
What happens upon your death? Although it's difficult to consider the worst, planning in case of your passing is crucial. Again, every country will handle this unfortunate circumstance a little differently.
Does the local government take over your property? Do your heirs have any claims? It's best to find out now, so you can make the appropriate arrangements.
Owning real estate in a new country is an exciting endeavor. You can make it happen if you take the proper steps and proceed cautiously. These tips are only a starting point. The specifics for your country can be found with further research.
Take your time. Hire the necessary experts, and do what you can to become an expert yourself. If you proceed methodically, your new home could come into your life quicker than you anticipated!
Jackie Wing is an Alaska native, who enjoys snowboarding more than is probably socially acceptable. She lives in Anchorage with her two dogs Reese and Peanut, or as she likes to call them "Thing 1" and "Thing 2."