Buying investment property overseas, in a country other than the one where you live. This means that you are qualified as a foreign investor in real estate.
Decades ago, foreign investment in real estate was subject to restrictions and limitations in a host of countries worldwide. Fortunately, many of these restrictions have been removed in Europe and beyond.
Table of Contents
- 1 Freedom of movement in the European Union
- 2 Why is buying investment property overseas attractive?
- 3 Buying investment property overseas? Keep the following in mind:
- 4 Buying investment property overseas: How do you search?
- 5 Foreign investment properties in the spotlight
- 6 Other information on foreign real estate
- 7 Additional information about buying investment property overseas
Freedom of movement in the European Union
There have been drastic changes, especially in Europe. Foreign investors can now invest freely in real estate in most Member States. This is even the case in Eastern European countries that used to be under communist rule!
The free movement of goods, services, people and capital in the European Union has made things much more liberal and easier.
Buying an investment property [AVAILABLE SOON] in the EEA is nowadays quite easy, also for cross-border financing (if you can offer collateral in your country of residence).
Only in Switzerland (not a member of the European Union but geographically part of Europe) are there some restrictions on the acquisition of holiday homes.
Buying an investment property in the Middle East and Africa is more difficult. The reason: there are still restrictions in place in many countries of the region regarding foreign investors.
Why is buying investment property overseas attractive?
There are a lot of reasons why someone might be attracted to a particular country and its real estate market [AVAILABLE SOON].
Some of these reasons are as follows:
- Lower price of properties compared to the home country
- Higher yields compared to buy-to-let properties in the home country
- Some destinations may offer a better way of life
- Certain countries have stable economies or fast-growing economies
- Other countries guarantee a much better climate to live in
- Still other destinations are attractive to specific types of people, all of whom also need their own place to live in:
- Pensioners [AVAILABLE SOON]
- Rentiers [AVAILABLE SOON]
Buying investment property overseas? Keep the following in mind:
Formalities and documentation
Nowadays, you have to provide a lot of documentation to prove your identity. The Know Your Customer procedures have been tightened up enormously worldwide.
This causes delays in the purchase procedure and often a confrontation with bureaucracy and many rules.
Legislation and taxation
Each country has its own legislation, including in the area of investing in real estate [AVAILABLE SOON].
For example, registration fees, property taxes, rental income taxes and capital gains taxes may be fundamentally different from those in your home country.
In some countries, you have to keep a property for a minimum number of years before you can collect the capital gains tax-free when selling it.
Purchasing an investment property in another country means that you will be confronted with a different culture.
This is noticeable right down to the level of government services. Sometimes there is also a language barrier, but you can get around this by getting good guidance.
Professional guidance - Buying investment property overseas
It is important to be guided by a professional who speaks the language of the country in which you want to invest.
In this way, you avoid complications and misunderstandings due to poor communication.
Also take into account exchange rate differences. Even in the European Union, not all countries use the euro.
Fluctuations in exchange rates mean that the price of a particular property in a country outside the currency union rises or falls in euro terms. This can lead to positive or negative surprises!
What is the goal?
Know what you want from your investment property! Is it a pure investment, is it for mixed use or is it pure private property?
This can have an impact on the region in which you will invest, as some countries restrict the purchase of pure investment properties to certain special zones.
Buying investment property overseas: How do you search?
On this website you can search for investment properties worldwide. You can do this in various ways:
- Either you have a particular country in mind that you would like to invest in. In this case, you are looking for investment properties through the country angle.
- Either you already know perfectly what type of investment property you want to invest in. In this scenario, you can start your search through the Property section. Here you can select your desired buy-to-let property such as:
- Hotel room
- Holiday home
- Student accommodation
- Either you are already 100 per cent sure what you want from your investment property and what its purpose is. Then you can search in the Goal section. Here you can choose between two options:
- Pure investment property (for rental only)
- Mixed use (private and rental during periods of absence)
- Finally, think very carefully about passive or active investment in real estate [AVAILABLE SOON]. Turnkey investment properties [AVAILABLE SOON] offer advantages, especially in terms of managing buy-to-let properties [AVAILABLE SOON]. It is an attractive form of investing in real estate [AVAILABLE SOON], without worries and with an attractive return. Passive investment in real estate [AVAILABLE SOON] is therefore on the rise.
- Pay sufficient attention to strategy and think carefully about what suits you! Read more about it at:
- Buy foreign property investment [AVAILABLE SOON] - A roadmap to financial success
- Choosing an investment market for property [AVAILABLE SOON] - Guidelines for making the best choice
- Manage buy-to-let properties [AVAILABLE SOON] - Why pursuing passive income makes sense, also for foreign investment properties
- The importance of choosing the right rental service [AVAILABLE SOON] for a foreign rental property
Foreign investment properties in the spotlight
Are you already looking for inspiration to see what is actually available to investors?
Then the following shortlist of investment properties abroad is worth looking at:
- Invest in a mixed-use holiday home and score at least 5% annual return. You will also receive 4 weeks of free private use in this luxury resort in France. View Buying a second home in France with guaranteed returns. In addition, you can benefit from two optional resale guarantees: Sell at a minimum of 125% or 150% of the original purchase price after 5 or 10 years respectively.
- Why not invest in French recreational real estate for tourists? With up to 8% return and from EUR 17 230 own contribution, the entry barrier here is quite low compared to participation requirements of other real estate offers. Private use is possible for a fee.
- Buy new property in Montenegro - Unique top location with options for pure personal use or for mixed use (in the latter case you can expect an attractive gross rental yield per year, however not contractually guaranteed)
- Buy second home on Samos in Greece - Ideal property investment for mixed use: Free private weeks of use on an annual basis + annual contractually guaranteed return calculated on the purchase price
- Buy a studen room in Leuven [AVAILABLE SOON] in Belgium with rental guarantee by the developer
- Buying German property as an investment with guaranteed returns
- Swedish rented family homes as a savings alternative [AVAILABLE SOON] - Property manager available and nice gross rental yield per year, not contractually guaranteed
Other information on foreign real estate
Additional information about buying investment property overseas
Take a look in the info corner! Here you can find a lot of information on types of investment property and on specific countries.
Many articles and pages are provided with the necessary statistics, figures and graphs.
You will also find very specific and in-depth information such as Why invest in real estate [AVAILABLE SOON]!
And read why investing in real estate with rental guarantee [AVAILABLE SOON] can be a suitable alternative to your savings account.