- Finding the right property
- Income properties
- Commercial Real Estate
- Bank Loan
Investing in properties abroad makes you face a lot of new challenges that you do not face at home. Each country offers its own unique set of challenges. Some of them originates from the rules and regulations that govern real estate in the country and some of them originates from having to work with real estate companies, builders and rental agents abroad.
General speaking we recommend against investing abroad without living there yourself or having a very trusted partner who lives there. It is to hard to manage construction, renovations and rental management from abroad. You will end up paying more than you should for renovations that take longer than they should and you will have to share your revenue with rental agents that have no loyalty to your properties.
It can be profitable to invest in vacation rentals abroad even after all the hurdles and cost have been taken into account. You can however usually get a higher return investing within the country while at the same time exposing yourself to a lot less risk. We are not necessary saying that investing in vacation rental abroad id a bad investments. We do however say that we do not recommend them due to the risk associated with them, and due to the work and frustration that all to often is associated with these investments.
The main reason to invest in vacation rentals abroad is usually that the buyer want a vacation property to use himself and that he wants to earn some money when it stands empty. The rental income can help pay the mortgage on the vacation house. If you have a vacation rental in a very popular area with a high occupancy rate you might even earn some extra money each year.
It is sometimes possible to get a bank loan for your vacation rental in the country where the house is located. It is however usually easier to get a loan in your native country than it is in the country where you are buying the house. The bank in your native country will have more information to base their loan decision on (employment, credit history, criminal register etc) and will therefore be more willing to offer you a loan. The bank in the country where you buy your vacation rental can only base their decision on the value of the property.
There are some situation where it can be beneficial to try to borrow some or all of the money in the country of the property. Examples of this include when the rates are lower in that country, when you want to keep your property secret or when you have poor credit in your native country. If this in the case then we recommend that you read local websites focusing on the country where the property is located. A Swedish website such as www.realfinans.se will always be able to provide the most reliable information about the situation in Sweden. Similar a German, Dutch, Spanish or Haitian website will always know most about the situation in their corresponding countries. It is a big benefit if you speak the local language since many websites such as realfinans.se provide information in the country’s local language. It is a lot harder to find reliable information in English.
It is very important that you know whether you are looking at an vacation property as an investment or something you want for yourself. Something to vacation in and perhaps even retire in. Never fool yourself that it is an investment if it is for yourself. The criteria for choosing a house for yourself are very different from those you would use to invest and the house you choose for yourself will almost never be the best house to buy from an investor standpoint. If you choose a house as an investor it will never be the house you would have chosen for yourself. It will never be the house you like the most.
Vacation rentals can be a very good investment if you move abroad and are able to oversee all parts of your investments yourself.