The current real estate market has an undeniable impact on the global economy. There is a plethora of information available to those who are interested in investing in international real estate company, however some investors often overlook certain details before making a major purchase. For this reason, it is important to keep these items in mind as you educate yourself about buying and selling international properties:
In order to make any significant profit with a real estate property investment, potential sellers must hold accurate knowledge of local taxation rates and foreign exchange rates. By calculating how much your property will cost when converted into each currency before the sale, you can gain valuable insight about which markets are more favorable for your particular investment. When it comes to taxes, it is important not to overlook any possible charges. According to Investopedia, "In some countries, homeowners are also taxed in a different way than wage earners. In the U.S., for example, homeowners are taxed on property taxes and considered income from property investment when it is sold." You will want to be aware of whether or not your area charges a foreign buyer's tax. For example, Spain added this type of tax in 2004 in order to help drive international investors away from Spanish real estate markets and stimulate growth at home.
As with any large investment, it is important that you understand the possible risks involved before making a purchase. For example, according to the Portland Business Journal: "The cost of international funding and the relative insufficiencies of the U.S. and international regulation have created a daunting landscape for risk." As you are assessing your interest in a specific country, it is important that you evaluate the risks and rewards associated with making your purchase.
Most investors are aware of the challenges involved in a real estate investment, however there are also several challenges associated with investing abroad that can be particularly difficult to get used to. For example, the large financial and logistical costs associated with foreign real estate can cause some investors to become uncomfortable when they are abroad.
According to a September 2011 article in The Globe and Mail, many European countries are now encouraging investors to keep their money within domestic markets as opposed to allowing them to invest abroad. In the article it is noted that "Europe's real estate markets have been weak, making foreign investment less appealing".
Thanks for taking the time to read this article. We hope you have gained some insight into how you can research an investment before deciding whether or not it is right for you.