Wanting to buy a piece of real estate somewhere overseas is a desire that many people share. It means that you have a place to escape to that is quite far away from your normal home. It also means that you don’t have to spend a fortune on hotels and other accommodation. It also has a plethora of other implications. Let’s take a closer look at 6 of the main benefits people have derived from investing in foreign real estate.
1. Easy Way to Invest
The number one reason why people invest in any sort of real estate is exactly that. It’s an easy way to invest. It doesn’t require too much capital and with benefits like the Portugal golden visa 2022, it makes a lot of sense. You can be a big spender, or you can make the investment without having a lot of capital. You can either pay it off in one lump sum, or you can pay it off in monthly increments. All you need is an initial down payment for the property and you begin the process of making it yours.
It also means that by the time you retire you have somewhere nice to choose. Make buying a new property an investment for the present and your future.
2. It’s a Tangible Asset
When investing in assets that are intangible, like bonds or stocks, you don’t have anything physical to show for it. This could be incredibly detrimental in cases where the stock market crashes, and your assets are now worthless. A housing market crash means much of the same things in terms of a loss of value, but you still have a tangible asset to show for it. You have a property that you can still rent out and not simply a piece of paper that says you own intangible stocks online.
The value of your property increases and decreases over the years, but you can sell it at any point in time. Hopefully, you are able to walk away having made a profit and a return on your investment.
3. Tax Benefits
Another very attractive benefit of buying foreign real estate is the tax benefits associated with the country you decide to purchase in. In many countries, you can get a tax deduction when you invest in a property, which reduces the amount of taxable income you have to pay the government. If it is your intention to live overseas then buying real estate could benefit you greatly in this way. Not only do you save on rental fees, as this all goes towards paying off the mortgage, but you get lower taxes owed.
4. Safety Benefits
There are a variety of potential safety benefits that come with investing in property abroad. This includes things like less threat of natural disasters and increased economic stability. Depending on where in the world you’d like to invest in property, the market could be a lot less risky than your domestic one. This means more stability and security for your investments.
For instance, if you live somewhere that is prone to tornadoes or hurricanes, you don’t want to sink too much money into domestic investments that could be ripped to shreds by bad weather.
5. A Diversified Portfolio
If you are all about your portfolio, then you’d be glad to hear that one of the main reasons people like to invest in foreign real estate is so that they can gain a more diverse portfolio for their investments. When you invest in a domestic property in your own country, your investments are basically tied to one market, which is not ideal. When they’re all tied up in one market, it is likely that they will be affected by the same things. If the local economy takes a dip your domestic real estate investment could suffer.
Investing in foreign real estate allows you to tap into another market. This foreign market comes with all sorts of its own risks and rewards that are not necessarily affected by your domestic market. This is a great strategy to implement as it can save you a lot of trouble. One market could be doing poorly, while the other was doing well, balancing your assets and limiting your losses. When it comes time to sell you also have access to all sorts of buys across a multitude of markets that are willing to pay for your property.
6. Income Potential
As we have alluded to throughout this post, owning a foreign property has the potential to generate a fair bit of income. When you invest in foreign real estate you have the opportunity to rent it out to help you pay your mortgage. You also have the opportunity to rent it out for quite a bit more and make a profit from it while simultaneously paying it off. You can use the rental fees that are generated from this space for anything you want, maybe to help you invest in even more real estate elsewhere. It pays off to not have all of your eggs in the same basket.
Having this additional stream of revenue is also a great way to help you pay for your travels, especially when you don’t intend to stay at the property often. You can use this money to offset any costs that incur when you are living in your home country or any other country you might be living in at the time.
It is important that you keep in mind that there are always some drawbacks that can be connected to investment strategies of this type. It is wise that you do all of the necessary research before you make an investment of this kind and magnitude. Take a close look at what sorts of costs you might incur or costs that could arise and make a plan. While the real estate market and property prices vary from country to country, there are tons of benefits you can enjoy as a result of picking the right place.
