More and More People Invest in Homes Abroad – Why?

The ‘general’ idea of how to live life is simple (and has been for decades):

That being said, not everyone wants to be this linear. 

Some don’t want to be within walking distance of their work, but would rather hop off to another country. Others are looking to invest in real estate to escape the traditional 9-to-5. Some people even choose to stick to the script but opt to go abroad as part of their retirement plan. 

There are lots of reasons why someone might be interested in investing in real estate outside their home country. 

And we aren’t talking about millionaires buying villas on Costa del Sol (although that’s not a bad idea, either). Teachers, remote workers, veterans, retirees, everybody’s jumping on the bandwagon.

Meanwhile, lots of Americans are still renting and spending their money every month, living paycheck-to-paycheck without building equity.

There’s a great benefit of investing in a place abroad, and in this article, we’ll go over why.

Investing Outside Your Country – Financial Benefits 

Lifestyle perks are important, but let’s be honest – most people are after the dollars. 

One of the biggest advantages when it comes to money is diversification. If you own real estate in another country, you spread risk across different markets and currencies. This means that you can protect your wealth if the economy at home takes a hit. 

And the entry price for a house or apartment is lower in many places outside of the U.S. than it is here, so that you can get it for cash or with a much smaller loan. There’s also the possibility of getting rental income from your property overseas, and that could be from vacation stays or having long-term tenants. 

For example, markets like Lisbon, Barcelona, and real estate in Jerusalem have all seen strong appreciation in recent years. 

Lisbon has lots of foreign investment incentives (Golden Visa, Non-Habitual Resident tax regime), and tourism is skyrocketing. Barcelona, as a cultural and tech hub, has always been a popular destination, but it has seen even more demand internationally, even though the supply is very limited due to strict zoning. Jerusalem, which has seen great unrest in recent times, is still seen as a long-term stable and resilient place to invest. Many Jewish community members want to buy property there.

This goes to show that global buyers not only see these cities as safe investments but also as desirable destinations. Now compare that to renters in the U.S., who keep seeing their monthly costs going up, but they really aren’t getting much in return. 

Of course, nothing is perfect; buying abroad has its own issues. You need to deal with different legal systems and taxes, and you need to manage a property from a distance, and it all makes things more complicated. 

But there’s so much potential here that many people will tell you the rewards outweigh the risks. 

What You Need to Consider Before Buying Property Abroad

Once you find a pretty spot on the map, here’s what to think about before signing that contract and becoming a property owner.

The Value of Location and Lifestyle

The location of the property is your number one consideration. Think about the climate, the local culture, how easy it is to get there, and even details like whether there are bugs there and whether they are really big and scary. 

You might find a cheap house, but if it takes two flights and a long drive to get there, is it really cheap? 

Market Stability

Please manage to find an area you fall in love with, but you have to be realistic. If the housing market is likely to crash there, move on. Some places grow slowly and steadily, others boom and bust. Look at how prices have moved over the last 10 or so years, so you can see if this is a safe bet or not. 

Rules and Regulations

Each country has its own way of handling property ownership, so you have some homework to do. Foreigners can buy freely in some places, but in others, there are limits or extra steps to take. You might need a bigger down payment, special approval, a local partner, or you might not even be allowed to make the purchase. 

Please do your research first so you don’t waste time on markets that make it too hard to own a property. 

Cost of Living

The house price is just part of the entire cost. You also need to factor in electricity, water, property taxes, and maintenance to get the real number. A place that looks cheap might be expensive once you add all the extra costs to it. 

Again, do your research before you sign anything so you’re not caught off guard later on. 

Conclusion

No one is saying that investments are easy or risk-free; if that were the case, more people would be doing it. Right?

It’s not easy, and it takes a lot of work, a lot of effort in order to do it successfully. You have to have both the knowledge AND the grind – otherwise, you won’t be able to get to the point where you can afford the investment, and even if you do, you’ll be blindsided by unexpected expenses.

Buying property abroad is an excellent investment, regardless of whether you’re looking at it from a financial point of view or from a ‘this is where I want to live’ point of view. All you have to decide on is where to do proper research.

Frequently Asked Questions (FAQs)