Investing in international real estate: everything you need to know
Investment opportunities promise great returns and are a great investment. In this article, we explain what real estate investment abroad is, the main advantages of investment, the risks and factors to consider when investing in foreign real estate, as well as popular investment destinations
Investing in foreign real estate is an attractive proposition for those who dream of additional income and are also looking for an opportunity to obtain a permanent residence permit or citizenship in another country. However, in order to invest successfully, it is important to consider various aspects and potential risks.
What do you need to know about investing in foreign real estate? A detailed guide follows.
What is an investment in real estate abroad?
Investing in foreign real estate is the purchase and management of real estate located outside the investor's home country.
This can be residential, commercial or industrial property.
Investors are eligible to purchase these assets through direct ownership, partnerships or real estate investment trusts.
The main advantages of investments in foreign real estate
The main advantages of investing in foreign real estate include:
1. Portfolio diversification – Investing in foreign real estate can help investors diversify their portfolio by providing access to different markets and economies. Such diversification can help reduce overall portfolio risk, as declines in one market can be offset by gains in another.
2. High Return Potential – Foreign real estate investments can offer higher return potential than domestic investments, especially in emerging markets or regions experiencing rapid economic growth. By choosing the right properties in promising locations, investors can achieve significant capital appreciation and rental income.
3. Tax Benefits – Investing in overseas real estate can provide investors with tax benefits depending on their home country's tax laws and the foreign country's tax laws. For example, some countries offer tax incentives to attract foreign investors, while others have lower property taxes or capital gains taxes compared to the investor's home country.
4. The right to obtain a permanent residence permit or citizenship.
What are the risks of investing in foreign real estate?
In addition to the advantages, investments in foreign real estate have certain risks that an entrepreneur should consider:
1. Economic volatility – Fluctuations in economic growth, employment and inflation can affect property values and rental income, potentially leading to lower returns or even investment losses.
2. Political instability – changes in government policy, political unrest or even conflict can negatively affect real estate values and the overall investment environment. It is important to carefully evaluate a country's political stability before investing in its real estate market.
3. Currency risk – fluctuations in exchange rates can affect the value of investments and profits. An appreciation of an investor's domestic currency relative to a foreign currency may result in lower income or losses, while a depreciation may result in higher earnings.
4. Cultural differences - it is important to have a good understanding of local customs, language and business conditions. Misunderstandings or cultural mistakes can lead to litigation, financial losses, or damage relationships with local partners.
What factors should be considered when investing in foreign real estate?
Before investing in real estate abroad, it is important to consider a number of factors:
1. Market analysis and research – at the first stage, the investor needs to study local real estate markets, economic indicators, demographic trends and infrastructure development to identify promising investment opportunities and make informed decisions.
2. Local Rules and Laws – Understanding local rules and laws is critical for foreign real estate investors: property laws, zoning regulations, taxes and other legal requirements that may affect the acquisition, management and sale of real estate.
3. Financing Options – Finding financing for foreign real estate investments can be a challenge, as local banks may be reluctant to lend to foreign investors and international banks may have strict lending requirements. Exploring different financing options, such as local banks, international lenders or private financing, can help investors find the best solution for their needs.
4. Property Management – Effective property management is critical to the success of foreign real estate investments. Investors should consider how they will manage their property, including tenant relations, maintenance and legal compliance. Many investors use the services of a local property management company.
Useful tips from an experienced investor
Anton Taranenko – Founder and CEO of online platforms Visit Ukraine and Visit World, owner of international development company AntaGroup
Before buying real estate abroad, you need to analyze the political and economic situation in the country you choose to invest your savings. If you invest for the purpose of obtaining income from resale or rental, it is important to analyze the stages and rates of development of infrastructure facilities, the availability of high-quality transport connections, take into account tourist flow and seasonality. It is important to study the market and understand its features. Study the history of the market, current trends and factors that may affect its development. Pay particular attention to the indicators of housing price growth during the year. My advice is not to invest your funds in one asset, distribute funds between different types of investments, so you reduce risks. If you invest all your money in one asset and it loses value, you could lose all your money.
As for promising foreign real estate markets, in my opinion, Turkey ranks first. Here the rules of the game are formed and understood for all market participants. In addition, Turkey leads the ranking among countries with a high rate of annual growth in the cost of housing and is among the five most visited countries in the world. By the way, according to our forecasts, the tourist flow from European countries and from the developed countries of the Arab world will increase significantly in Turkey in the near future. This means that the investment attractiveness of Turkey will be significantly strengthened.
Having analyzed in detail all the criteria of successful investments, AntaGroup company helps investors to save their time and get a high passive income. We implement projects in Turkey in the most promising areas of the city of Antalya, where the investor has the opportunity to purchase real estate for further rental or resale at an opportune moment when housing prices will increase significantly:
- HASAN BEY RESIDENCE – business class complex;
- HMG GOLD RESIDENCE – a comfort-class complex;
- HMG RESIDENCE – a comfort-class complex.
The next real estate market that our team and I believe in, and where we are already developers, is Indonesia, the island of Bali. The place is maximally cosmopolitan, multicultural, multifaceted and popularized. These factors provide the most favorable conditions for obtaining income from investments, and this is where there is a steady increase in foreign investment every year.
The Anta Group team chose the best place in Bali, in the popular tourist area of Canggu, 7 minutes from the Indian Ocean, and is creating a profitable investment project here - a 5-star hotel complex with a unique infrastructure, ANTA Residence Canggu.
And the last piece of advice is to take your time! Investing is a long-term game. Don't expect quick and easy money!
Popular destinations for investments in foreign real estate
Europe is a popular destination for foreign real estate investors due to its diverse property markets, strong economy and rich cultural history.
The main directions for investment include:
1. Portugal's beautiful coast, hospitable locals, excellent climate, and high-quality medical and educational services are just some of the reasons for the country's attractiveness.
Another advantage is that real estate prices, especially in the interior of Portugal, are very reasonable compared to other Western European countries.
Lisbon, Porto and the Algarve have long been favourites, but you'll also find spacious accommodation along the Silver Coast.
When it comes to buying real estate in Portugal, there are no restrictions for foreigners. You can also qualify for a Portuguese Golden Visa if you are a non-EU citizen and invest in real estate in the country.
2. Greece - the real estate market in Greece is one of the most attractive for buying real estate, because the "Golden Visa" program operates here. Foreigners who invest a minimum of 250,000 euros in foreign real estate in Greece can obtain a residence permit in the country. The main applicant and his immediate family members can live and work in the country with a Greek Golden Visa.
3. Spain - Vibrant culture, exceptional cuisine and a range of stunning places to buy foreign property make Spain a favorite among foreign buyers. Spain also has its own Golden Visa program.
3. Turkey - the country has an attractive real estate market, where you can get a high return on investment. The state has a favorable geographical position, a strong economy, programs developed by the government to attract foreign investors, a qualified and competitive labor force in the country, a high level of development of transport infrastructure, moderate cost of doing business. Investors also have the right to obtain Turkish citizenship. Read more about the advantages of investing in real estate in Turkey here.
The rapid economic growth of Asian countries makes it an attractive place for foreign investment in real estate.
Indonesia, the island of Bali, which is simultaneously recognized as the most desirable destination in the world according to Booking, the best tourist destination according to Tripadvisor and the top region for investment attractiveness according to Forbes.
Foreigners can invest in Bali's economy without having Indonesian citizenship, and there are no mandatory residence requirements.
According to experts, the amount of net profit from the sale of apartments in Bali, purchased at the construction stage, will be 44% in three years. When renting real estate, you can return the investment in 5-6 years.
Countries such as Japan, South Korea, Singapore and Hong Kong are recognized as investment hubs, while emerging markets such as Thailand, Vietnam and the Philippines offer the potential for high returns and capital growth.
South America has increased interest from foreign investors in real estate, which is driving its economy to grow and improve its infrastructure.
Investors can find a wide range of investment opportunities, including residential, commercial and industrial properties in both urban and rural areas.
Investing in foreign real estate can be a useful and profitable business, but only for those who take into account all the risks, conduct thorough research and choose profitable locations and reliable developers.
Potential overseas property investments may look attractive in brochures, but you don't know what a place is really like until you see it in person. Therefore, we advise you to visit the country before investing.
Daria Rogova, Head of Insurance at Visit World
To move, travel or work safely in a new country, you will need health insurance. You can apply for an extended policy on our website here.
Products from Visit World for a comfortable trip:
Travel guide for 200 countries;
Legal advice from a local specialist on visa and migration issues;
Travel insurance around the world (please select the country of interest and citizenship to receive services);
Medical insurance all over the world.
More articles on the topic:
Golden rules of investing: what to look for for successful investments.
Find here the key factors of investment attractiveness of a real estate object.
How to make money on foreign real estate - we tell you here.
Investing in real estate during the war: how to survive in war-torn Ukraine and other parts of the world.
Hotel business in Bali: one of the best hospitality industries.
Reasons for choosing global investment: the power of international investment.
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