Buying A Property Abroad

Buying A Property Abroad

There are any number of reasons why you might be considering buying property abroad. Maybe you fell in love with the local area while on vacation, or you’ve always envisioned yourself living the sunny island life with your feet in the sand after retirement. Buying property abroad seems more like an unattainable fantasy. However, it’s not as far-fetched as you may think.

With our guide, you can learn how to buy property abroad and find international mortgages. We’ll cover how to avoid overextending on renovating and renting out an overseas property. And you can use our checklist to plan your international home buying.

Can You Buy a House in Another Country Without Being a Citizen?

You can be a citizen of one country and purchase a house in another country. One factor that makes France, Italy, and Portugal popular with foreigners is that they welcome international buyers.

Yet some countries don’t allow foreigners to buy any property. Others allow it with reasonable restrictions. One example of such a restriction is in Australia, where foreign buyers are limited to new buildings or vacant land. It’s easy to learn about buyer restrictions, online or from real estate agents. They know about the rules for their country, and which of their properties can be sold to overseas buyers.

Should You View Overseas Property In Person?

It’s always best to view property in person before you buy. Yet if you have a realtor you trust, with today’s technology and video tours, remote buying is an option. Often, what makes this succeed is that the buyer has been to the country and the region or city. Sometimes they ask for a specific neighborhood, even a particular street!

About International Mortgages

Getting financing to buy an international property can be surprisingly easy. If you have good credit, clear financial records, and a right to residency, you’ll have options in your destination country.

The easiest way to buy property abroad is with an all-cash, no-finance purchase. Some foreign buyers are wealthy. Others sell their current property and use the funds to buy a place outright in a more affordable country. As a starting point, budget 10% to 20% of a property’s value for legal and closing costs, including taxes. Savvy buyers track conversion rates so they can get the most for their money during the exchange.

What Is the First Step to Buy a House in Another Country?

The best place to start with buying property overseas is by researching home buying in your destination country. Here’s a list of questions to guide you to your answers about home buying. Some are personal answers, about you and your goals. Others are answers you need to find about house hunting, and legal and financial information, for your destination.

Your Checklist for Buying Property Abroad

House Hunting From Abroad

• How do you find properties for sale at your destination – via a Multiple Listing Service (MLS) or individually?
• Do you work with a realtor or with an agency that focuses on helping expats buy property?
• Are you able to visit your destination and view properties in person?
• What kind of home or property would you like? Consider your budget, lifestyle, and your appetite for renovation.
• Do you speak the languages you need to, or will you need a translator?

Legal Requirements for Foreign Buyers

• Does your destination have any restrictions on, or requirements for, foreigners owning land or property?
• Similarly, are there any restrictions around buying land to build on, or a house or apartment under development?
• What rights will you have when you buy property? You can also ask what ownership or title of property mean in your destination.
• How do you hire a property lawyer?
• Is title insurance available to protect you against defects or disputes around a title to a property?

Finance for Foreign Buyers

• Can you get a foreign national mortgage in your destination?
• Are international mortgage brokers available?
• What are your banking requirements to be eligible for a foreign loan?
• What types of property can be financed with an international mortgage?
• How much of a deposit do you need to pay to get mortgages for expats?
• What interest rates are available for your international home loan?
• How much will you need to provide for a deposit in escrow?
• How will you send or transfer money to an escrow account for deposits and payment? Can you do so via a money transfer tool that can help optimize your exchange rate?

Purchase Process and Costs at Your Destination

• How do you get a pre-purchase property inspection?
• What are closing costs and purchase taxes? Are there additional requirements for a foreign buyer?
• How much are property taxes each year?
• What do you need to do to insure your home?
• Is it possible to rent out property when you are not there? Would this impact your insurance?
• If you decide to sell your property, will you have to pay a capital gains tax?

A final step is to reach out to people living in your destination country — through friends, forums, blogs, and meet-ups. Ask them about their experiences buying a house abroad, and what they recommend or would do differently. Many expats are happy to share recommendations. You’ll get great advice and real inspiration, and maybe meet your new neighbors.