Purchasing property in multiple countries is a great way to help diversify your real estate investments.
It also provides a great financial "safety net" if the economy in one country goes through a recession (such as 2008) at any one time, the properties you own in other countries may retain more value. While recessions will affect the global market and some countries will be harder hit than others, your property in a different country may hold more value than the property in your home country.
However, despite being a great way to diversify your income, owning foreign real estate will require a great amount of planning and management on the part of the property owner to properly maintain the property and keep it in good standing with the government in the country where you purchased it.
If this financial "safety net" sounds like a great way for you to diversify your finances and invest the time and energy needed to maintain that property, then the following are four great reasons to consider owning foreign property:
1. Buy Property for Less and Use It For Retirement
Buying property in many other countries is much cheaper than buying property in the US. Buying property abroad is what allows many people to afford a second residence at all. For example, you can spend $500,000 on a beach house in Florida, or spend $80,000 on the same property in a country in the Caribbean or Costa Rica. Many foreign countries allow people to buy a lot more house for a lot less money. It's also a consideration to use this as a retirement property as you will be able to live for a small fraction of the money that you would be able to live for in the U.S. during your retirement years.
"Right now we're seeing an upward trend in US residents who have a desire to retire and live part-time overseas -- preferably somewhere with sunshine and beaches. Many of our residents will purchase their retirement home around 5 years prior to retiring and rent their home to guests as a way to offset the ownership costs. Then once they retire, they stop renting out their second home and keep it for personal use." -Chris Williams, CEO of Legacy Global Development
2. Live, Rent, Remodel, or Sell: It's Up to You
If you own the property, you control what happens on the premises. If you are living there it can be your primary residence. Otherwise you can rent it out to vacation goers in the local area to make a profit from the property when you are not using it. You can renovate or remodel as you see fit. You can also sell the property as you choose. Buying versus renting something means you are in control of what happens with the property. Just be sure to understand local laws and remain in good standing with them as to what you do with the property you own in that country.
3. Earn Income Internationally
If you buy real estate overseas, it's a great way to make income internationally. This helps you avoid becoming totally reliant on the future of the U.S. dollar. Those who own properties abroad have something of a "safety net" to fall on financially if the U.S. dollar were to lose value.
4. Receive Impressive ROI
Some areas with booming real estate can provide a great return on your investments as home values can go up as much as 10% annually. Even if you choose not to live here permanently and want to sell the property, it will ensure you get your initial investment on the property back, and a nice additional payday as well. The key is to invest buying foreign real estate overseas in the right places and in the right markets. A luxury development company that knows the local area should be able to help with that.
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