Diversifying your investments, having a secondary residence for the holidays and preparing for retirement under the sun – all of these arguments are factors that can motivate a real estate investment abroad. However, be careful, caution is still required.
Find out why you should invest in real estate abroad, as well as how to choose your property and complete the transaction. Our keys to financing this particular real estate investment lie in our focus on the taxation in force.
Invest abroad to benefit from more attractive prices
Indeed, the real estate market is growing less accessible despite the low interest rates. Real estate prices are exploding and investing in France is no longer accessible to everyone. In 2019, half of the Parisian districts posted prices well above S$16,000 / m2. Real estate prices in France are increasing faster than household income, which is not the case in all European countries.
But it would be wrong to neglect Hungary and its booming capital, with prices that have increased by 35% since 2020. Rome also seems to be doing well. The freestone apartments in the heart of the Italian capital are negotiated at around S$3,250/ m2, a price that attracts foreign buyers.
Low-cost companies and the Internet have made foreign real estate investment easier
The arrival of low-cost airlines has brought down space and time borders. It is now possible to be in Barcelona in one and a half hours for S$50. The Internet also allows you to get in touch with the whole world without leaving your home.
Finding the right deals remotely is possible. Be careful, though. Making a successful investment abroad cannot be improvised and therefore, you should follow the advice presented in this article. When it comes to investing in this area, it is recommended to go with an established real estate investment firm like Real Vantage that does in-depth research that reduces your investment risk.
Choose the country of your real estate investment abroad
- First of all, choose the country in which you want to invest in.
- Favour countries with a stable political climate and independent and effective courts. To assess this, you can use the rankings published by international organizations.
- You can then supplement it with other studies, such as Transparency International, which publishes a corruption perception index.
- In any case, doing research can help you to avoid any unpleasant surprises. Don’t blindly trust what you can find on the Internet or in brochures. Check and cross-check your information.
Foreign real estate investment: know the specificities of the local market to avoid unpleasant surprises
It is better to be accompanied by a specialist lawyer to ensure that the property you want to acquire has not been built without a permit. It is also recommended to know the legal specificities of the country you want to buy in. In Portugal, for example, receivables are passed from seller to buyer. If the seller has debts which are included in the property’s value (like a mortgage), this is passed on to the buyer after signing the deed of sale. Here again, a specialized lawyer can help you by drawing up a complete inventory of the debts transferred to the charge of the purchaser. They can also help by checking the status of the subrogation with a specialised establishment.