Owning property abroad in a foreign country can seem like a far-fetched idea for some people, but in reality, it’s a good investment opportunity. Increasingly, people in the U.S. are sending money to countries in Central and South America like Nicaragua, Belize and Costa Rica, as well as throughout the world, to secure property.
Purchasing property in a foreign country can include buying something like a condo in a resort community, a single-family home, or buying a piece of land.
So what are the benefits of owning property abroad?
In most places around the world (with some exceptions of course) buying property overseas and in international markets is going to be a more affordable opportunity than buying in the U.S.
A lot of this does depend on things like changes in currency, and the local market, but by and large, it is going to be a more affordable way to invest in real estate, particularly desirable real estate like beach property, as opposed to buying in the U.S.
When talking about investing, diversification is the primary objective of almost everyone. Diversification can provide investors with better returns and can protect them against certain downsides.
What better way is there to diversify than to purchase real property in another country? You’re buying an actual physical investment in a different country, which in and of itself is a good reason to buy abroad.
When you purchase certain types of international properties, you can leverage them as a way to earn an income stream.
For example, if you purchase a beach property in Costa Rica, you can then rent it out and have that money coming in. When you are buying an international property, think about what’s going to make the most sense if you do ultimately want to rent it out. For example, two-bedroom condos tend to be the most appealing for vacation renters.
Think about the other considerations that will be important to most renters as well, such as location, security, and amenities. You may pay a little more for certain features, but that can more than be made up with the rental income.
There are certain tax advantages to owning international property, and they can vary depending on the specifics of the circumstances. One possible advantage is that when someone in the U.S. owns an overseas property, they can include travel costs as a deduction.
Also, if someone faces a lawsuit in the U.S., it can be much more difficult to bring overseas assets and properties into the equation.
Finally, if you purchase international property, you also have the opportunity to enjoy it. You can visit while you’re still in your working years and learn the local language, and be part of the culture in a much deeper way than you would be if you just visited for a week.
You then have that property ready and waiting when it’s time to retire, and you’re already comfortable with the location. It’s a great way to start preparing for your retirement while simultaneously having an income stream, a diversified investment portfolio, and the potential for certain tax advantages.