For anyone who has dabbled in the world of domestic real estate investment, the obvious next step is to expand your portfolio and begin to look for opportunities overseas.
There are a great number of benefits to this choice, not least the ability to protect your overall investments from the irregularities of the domestic housing market – but the process of investing overseas is rarely as simple as one might hope. Below, we’ve detailed the three most common mistakes people make when investing in overseas real estate, as well as some advice on ensuring you’re able to avoid the same issues as you progress along your own real estate investment journey.
#1 – Over-focusing on popular locations
There are numerous hotspots across the globe for those looking to invest in property overseas, and you will likely be drawn to these hives of activity also. While it’s generally positive to be led by demand, over-focusing on these popular, of-the-moment destinations can cause you to miss the potential elsewhere.
While it’s always worth looking into the possibilities in the cities and countries most famed for providing excellent opportunities to overseas investors, it’s helpful to also expand your scope further. There are countless real estate investing opportunities outside of the more in-vogue choices, all of which can be just as profitable – if not more so – than the better-known options. By expanding your horizons, you may be able to find the hidden gem that is the perfect choice for your property portfolio.
#2 – Lack of research
The purchasing of buying homes, offices, or commercial buildings seems relatively uniform, as if it would be similar throughout the developed world – but, unfortunately, this isn’t the case. Assuming that the process of buying will be as simple as the domestic process you are accustomed to is likely to lead to more than a few unpleasant surprises, some of which may be severe enough to derail your plans.
When you have settled on a country or city as the location for your property venture, a long period of research should begin – before you look at properties. Take the time to understand the market, the local customs, and the tax laws; when you’re confident you know what is required, you’re ready to take the next step.
#3 – Failing to account for language-related delays
If you are buying property in a country where English is an official language, then there are no particular concerns in this area. However, if you’re buying in a non-English speaking country, it’s vital to note the difficulties the language barrier will present – even if you speak the local language fluently.
Many investors assume that language will not be an issue when investing overseas, especially given the raft of translation and interpreting services that can help overcome this issue. However, translation and interpretation take time, which will impact your overall progress on your investment. While this is manageable, you do have to be aware of it and plan accordingly to ensure you’re prepared for the occasional long delay.
In many ways, investing in real estate overseas is similar to the domestic market – the process of finding the right properties to meet demand is the same, and you’re subject to similar influencing economic factors. However, overseas investment can also be incredibly difficult; by avoiding the most common mistakes as described above, you can be confident of making the right decisions as you look to expand your portfolio abroad.