A key focus of my blog is Financial Literacy/Money. Purchasing a home is the greatest purchase and investment many people will ever make. In many places across the country, the housing markets have become exclusive to the point where people can get in. One option is purchase property abroad. The following contributed post is thus entitled, Locked Out of the Property Market? Go Abroad.
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Back in the days, our parents were able to buy their first home for next to nothing. Getting their first job was a fairly easy achievement as well and, sadly, something that many young adults find to be a much bigger challenge.
While some people are able to get a hold of their very first house or apartment with the help of their family or a degree in a field that needs more candidates, most of us are still struggling to make ends meet – and the real estate dream seems further away than ever.
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Luckily, there are options out there and you won’t necessarily have to be renting a flat until you’re in your mid-forties either. Here is a handful of ways to achieve the property dream abroad instead of in a difficult market at home so that you can make a passive income that way – or just become an expat instead.
First: Research the country
If you have never considered buying property abroad before, you’re probably at a loss in terms of where to even start. Where you decide to invest should, of course, depend on a few factors: how much money you have to invest, whether or not you’re looking for a tropical holiday home, and how profitable it is for foreigners to invest in the country.
Some of them are up-and-coming and may give you a decent profit if you manage to hang on to it for a few years or even a short decade. Others, however, may seem tropical and dreamy but make it tricky for foreigners to invest. That’s why you need to do some decent research first and consider your own intentions as well.
Start by checking out this site to learn more about the best countries to invest in, at the moment, and keep in mind that the political climate and the country’s general economy may affect how great of an investment you’ve made.
Research is the keyword here – and the more you know, the better prepared you’ll be when it’s time to make a decision.
Next: Figure out your mortgage options
While a lack of knowledge tends to be the first thing that puts most foreign investors-to-be off from a real estate project abroad, to begin with, they’ll often be thrown off when they try to find funding for their new property.
Keep in mind, however, that some countries are a lot cheaper than others and, if you’re able to, you’ll save yourself a massive amount of hassle if you can just pay everything off at once. Consider your inheritance options, for example, and see if you’re able to get some of it in advance – that way, you might be able to buy a smaller flat without having to take up a loan at all.
That’s the kind of stuff that will make you quite a bit of money when you rent it out as you’ll only have maintenance expenses on the property.
If not, it’s a good idea to ask your parents if they can take out a mortgage on their property and lend you this money – either as an inheritance in advance or just as a pure loan. It will be much easier for you to pay them back once you’re able to rent your new property out, after all, and their generation can start to feel a bit less guilty about the terrible real estate market they’ve left us in.
Have a look at this article on mortgage loans as well, by the way, to learn more about your options when buying property abroad. There are other ways to obtain a real estate overseas besides from depending on your parents or using the lump sum you’ve saved up, though, so consider other options such as financing it through a bank here at home.
While it may be difficult to get a mortgage loan for a property abroad through a bank in your home country, it’s not necessarily impossible. Do your research before you settle on anything final and keep in mind that buying a property at home would have been just as difficult – and much more expensive.
Remember to read up on whether or not you’re allowed to rent this property out as well. Some countries, such as Spain, depend on tourism and make a large amount of money from accommodation during the high season. It just doesn’t make sense for them if foreign investors step in and rent out their own property for next to nothing through Airbnb or similar.
Research, ask a professional for help and keep in mind that you’ll always get there in the end.