Investing In Real Estate Abroad

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Foreign Investment Trends In The Us

How Investing In Real Estate Abroad Affects Your US Tax Return: Foreign Tax Credit & IRS Reporting

The U.S. government charges investors from certain countries a tax of up to 30% on profits made from U.S. commercial real estate. But many overseas buyers have been able to avoid paying this tax, which isnt assessed on U.S. companies, through a complex maneuver involving loans from offshore entities. Now, a provision in the Build Back Better bill would likely end the practice. The bill passed the House of Representatives last month and is now being discussed in the Senate, where it faces an uncertain fate among divided Democrats.

Before the COVID-19 Pandemic struck, foreign buyers spent over $267 billions dollars investing in U.S. real estate. In 2021, that number fell to $107 billion. However, the United States is expecting a flood of buyers as borders opened to 33 countries in November of 2021. These buyers are most often looking for new construction in coastal areas like New York City, California, or Florida, though Texas and Arizona ranked high on their lists.

Investing In Overseas Real Estate From India A Checklist

Purchasing and Maintaining Foreign Real Estate Is Getting Easier

4minutes read

Real Estate is the first name that pops up if an Indian investor is asked to pick an alternative investment other than equities. But the property market in India has faced trials and tribulations of its own over the last decade. Investors turned to other options like gold, fixed income, and commodities in a hunt for better yields and diversification. But have you ever considered investing in overseas real estate? Well, many Indians have certainly started giving that serious consideration. Higher yields and availability of fractional real estate have helped in driving the momentum towards international real estate.

Over the two Covid-19 waves in India spanning the last year and a half, Indians have chosen to invest in their second homes abroad. Attractive investment destinations include countries like Netherlands, Germany, USA, and Australia among others.

What Will Happen With Interest Rates In Europe

Higher interest rates have been predicted for years, but everyone was wrong. Interest rates are still very low stabilising at best but they are certainly not rising significantly. Europe is now in a situation with interest rates mostly below 1%.

Without any inflation, yields or potential profits will not rise. Despite this, investors know that if they buy today, they benefit from financing at a very low cost of borrowing. This trend is occurring almost everywhere in the world housing markets are very popular. Everybody is trying to finance or refinance their mortgage to acquire a home while mortgage rates are so low.

Many investors ask about the artificially low interest rates: how long will they last? Another year, two or maybe three? Nobody knows for sure, but we do know that interest rates will rise again. We may then have a serious market problem if you bought property, whether commercial or residential, with low yields of 3%, even a 12% rise in interest can have a serious influence on your profit return.

When financing your real estate, it should be done at fixed rates. Buyers shouldnt consider financing at floating rates, because besides being dangerous, with interest rates so low, why consider a floating rate? This is no longer necessary.

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Investing In Real Estate Abroad In 2020 Massive Opportunity Or Too Risky

In these times of economic turmoil and uncertainty, alternative assets are top of mind for many investors. Real estate has proven one of the best investments to weather such crises, and this current downturn is no different.

More specifically, international real estate is uniquely positioned as investors seek stability, steady yield, and diversification.

It allows them to tap into the higher growth potential of emerging economies, different asset types and geographies, unique tax advantages, and a more global lifestyle.

Moreover, recent swings in currency values have drastically lowered prices across some of the most attractive markets in the world Colombia, Turkey, Mexico, and more. If youre a USD investor, property values just got ~20-30% cheaper!

Yet, the asset class remains notoriously difficult to access and navigate.

It all starts with figuring out which countries offer the strongest investment potential and best fit for you, and that can be a daunting task given the vast universe of foreign markets out there. To help simplify that initial step, Remote Ventures recently released the Top 25 Global Real Estate Markets in 2020.

Get To Know The Neighbors

Investing in Canadian Real Estate While Abroad

Before buying a property, its important to understand the community and area you are buying in to. These factors have a big impact on whether your property value will grow as expected. So if possible, meet and greet the neighbors next door and ask them a few questions. They might have some valuable insights.

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Risky Vs Stable: Where Are The Best Places To Invest In Real Estate

On one hand, we have the core, established property markets that hardly saw any crisis. On the other hand, main European capitals such as London and Paris are considered a safe haven for real estate. The UK, France, and Germany, for example, took the bulk of investment volume accounting for more than 70% of transactions prior to 201617, and they remain the firm favorites for investors. Certain neighboring countries in southern Europe, as well as some countries in the north and in central Europe, had more volatile markets earlier in the decade, but are now experiencing growth.

Taxes & Travelling Costs

If you have investment properties overseas, you can deduct the cost of travelling to those properties from your taxes. Real estate investors love to save cash, and this could be a good way to effectively travel for free! You get the money back from your taxes later on, and you can still visit your home abroad as much as you like.

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Investing In Canadian Real Estate While Abroad: Have Your Down Payment Ready

Its important to note, that regardless of who you obtain your non-resident mortgage from, you should ensure that you have your down payment funds in a Canadian bank account for at least 30 days ahead of finalizing your mortgage. Non-bank lenders may be more lenient on this, so its always good to clarify ahead of time.

What Does The New Age Of Foreign Investment Look Like

Investing in Real Estate Overseas: The Ultimate Guide

Industrial, multifamily properties stayed hot retail, office spaces lost share

There has been a noticeable pattern in the recent trends of foreign investors, especially in comparison to their traditional property type preferences. On average over the past three years prior to the pandemic, foreign investors have overwhelmingly preferred office properties with more than a 38% share of total investment volumes, particularly concentrated in metro central business districts compared to suburban office parks at 25% to 13% respectively.6 As shown in figure 1, multifamily properties made up the second largest concentration on average, followed by retail, industrial, and hotel. These concentrations are a stark differential from their domestic counterparts, who overwhelmingly preferred multifamily properties followed by office, industrial, retail, and hotel.

Since the onset of the pandemic, property sector preferences for foreign investors have made four distinct shifts:

1. Inflows

2. Outflows

  • CBD office, which has traditionally been a favorite of international investors and has historically often consisted of trophy assets in prime CBD locations, has dropped 7% from the pre-pandemic average of 25% to 18%, the second steepest pullback behind retail.11 While traditionally offices have provided stable returns and consistent income streams, the pandemic has created a shift in work location patterns, and in turn, a shift in office property income stability.

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Costa Ricas Southern Zone

The Southern Zones wild biodiversity makes it an adventure and nature lovers paradise

Costa Rica is well-known for its tourismand its stunning environment. As it should be. Its worked hard for decades to position itself as one of the top countries in Central America for overseas visitors. And for its efforts, its been well rewarded.

Tourism was one of the drivers that led to a major Path of Progress that rolled through much of the country in the 1980s and 1990s. Investment in infrastructure made previously unreachable beach towns easier to get to. Vacationers camefollowed by people in search of second homes and vacation rental properties.

Theres a lot to appeal to those who visit: Clear-blue skies and long, unspoiled beaches. Surfing and adventure sports. An abundance of natural parks. Wildlife and tropical flowers all around. And some of the friendliest, most relaxed people in the world.

Today, the countrys tourism industry is well developed. Costa Rica counts more than one tourist for every two locals. Its a big part of the countrys income.

For the most part, as tourism numbers have risen, so too have real estate prices. When it comes to profiting from real estate, you have to dig deep to find the opportunity. But do it rightbuy in the right place in Costa Rica at the right timeand you could make a killing.

Where well make a killing is in the countrys Southern Zone.

Im working on similar deals for RETA members in the near future.

How To Invest In Foreign Real Estate

As many of you who follow me on Instagram already know, I recently took an overseas trip to China and Japan.

While I was traveling in Japan, I got to thinking what if I could mix business and pleasure? What if there was a way to invest in real estate abroad, but also enjoy it for myself?

If you want to combine a love of travel with a love of business and create a flexible working environment for yourself, then have property abroad to go to any time you want, can be a real asset.

Many people are put off by the idea of investing in property abroad, as it can conjure up some images of things that they may have seen online or in the news about property building projects going bust, social or political instability, crime, riots, etc.

Its not all doom and gloom when it comes to property abroad. It can be very simple to make this part of your portfolio if needed, as well as treating yourself to a second home or vacation rental.

Investing abroad is no different than investing domestically. Really, if you think about it, to the people living there, it is domestic.

The way to avoid investing in a disaster abroad is by doing your homework. That, and following a few investment rules. If you are unsure about the market abroad and want to know more, then keep reading.

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How To Buy A Property Abroad

Understanding the risks and rewards coming from buying an investment property abroad is just the start. The next step is to understand details about the market, tax implications and relevant property legislation for everything you need to know, we recommend downloading our ebook, The Retirees Guide to Investing in Property.

If youre serious about investing in foreign real estate, be sure to have a look at our properties for sale on the Costa Blanca in Spain.

Consider Your Tax Liability As An Investor

Is Real Estate Investment Abroad A Good Idea?

Everyones tax circumstances are different, and this is especially true in the diverse and changeable real estate market. Each nation will have its own unique body of tax laws and legislation, which may require you to repay costs such as stamp duty, title transfer tax or even inheritance tax at the point of purchase. Beyond this, some countries also require home-owners to pay land tax as a condition of their mortgage, and this is usually an annual cost that can eat into your capital. These potential costs must also be factored into your budget, as otherwise you may face significant legal penalties.

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Obtain An Independent Valuation

If you were purchasing a home in the UK, you would not think twice about requesting a structural survey and an independent valuation. Many investors fail to do this when purchasing an international property, however, due to the cost and logistical challenges of organizing these tasks from a remote location. Obtaining an independent valuation and guaranteeing the integrity of the property is a fundamental part of any real estate transaction, however, and it is important to remember that any costs are a small price to pay to protect a larger investment.

Why Are Real Estate Investors Still Flocking To Europe

Just a few years ago, everyone was predicting the end of Europe, especially the end of continental Europe. But we have still seen ever-increasing property prices as investors flock to the markets Berlin, Lisbon, Dublin, Rotterdam, and Zagreb are among the European cities experiencing high levels of growth. This is good news for wealthy investors, but brings challenges for those less well-off and first-time buyers.

Indeed, real estate markets in Europe, whether commercial or residential, are actually very expensive. Yet the continent, with its modest economic growth and low inflation rates continues to attract global investors.

The reason for this is all linked to the monetary policy of the European Central Bank , and it has nothing to do with real estate. The ECB has a loose monetary policy of keeping interest rates artificially low in October 2021, it decided to keep them unchanged at 0.00%, 0.25% and -0.50% for as long as necessary. Investors, therefore, dont see any other possibility than investing in real estate. Buying stocks can be too risky as they are volatile, and bonds are expensive considering yields are still hovering around very low levels.

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What Is Real Estate Trend Alert

Opportunities in real estate are everywhere, but that doesnt mean that everyone has access to them. To find the kind of deals that can double your money, it takes time, connections, and lots of resources. More than most people have

Thats why I formed Real Estate Trend Alert . Its a group of like-minded investorspeople just like youwho can benefit wildly from the scouting and research that my team and I conduct.

My team and I spend up to $1 million dollars a year on travel, research, and analysis, pinpointing the best deals and putting together my reports on stand-out opportunities.

I am in the business of mining opportunity nobody else findsculling through the mounds of unworthy offerings to identify the gemsand Im committed to bringing every serious opportunity I find to members of RETA.

In 2019 for example, I told Real Estate Trend Alert members how to

  • Make $22,500 per year in rental income buying condos steps from the beach in Akumal, a small town on the Mexican Riviera
  • Make $32,000 per year in rental income with a luxury villa project in Costa Rica
  • Own premium lots in a Brazilian beach town for a tiny $250 per month
  • Land a whopper $247,700 windfall buying in Panama Citiys most exclusive new development
  • And much more!

By joining RETA , you have access to every new opportunity and all my latest research ahead of everyone else.

Opportunities For Real Estate Investment In 2021

Why should Indians invest in real estate abroad?

Besides the risks, this survey also identified the greatest opportunities for real estate investment in 2021.

As already mentioned in previous surveys, the growth and strength of the US market represent a constant opportunity for real estate investors in 2021, as well as low-interest rates and attractive yields.

Diversification

Diversification is one of the most prominent real estate investment opportunities that resulted from the survey. In particular, scaling of the investment portfolio, the diversification to create long-term cash flow, market liquidity, and real estate quality.

Additionally, other opportunities mentioned include the exposure to sectors and opportunities uncommon in domestic markets and diversification into established and/or emerging markets

US growth and stability

As with most economies, the US has taken a battering as a result of the COVID-19 pandemic, experiencing particular struggles with unemployment. That being said, the US property market has remained relatively resilient during the time.

The Feds decision to keep interest rates at zero means that mortgage rates are expected to stay low for some time. As a result, the ability to secure cheap loans has fuelled demand for property within the US property market.

Simple size of the US market and greater liquidity means real estate investment opportunities are still there. Other opportunities include higher growth than European countries better cap rates in the US and positive debt financing.

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San Miguel De Allende Mexico

Get the right real estate in San Miguel at the right price and you could make a killer rental yield

The beauty of San Miguel de Allende in Mexicos colonial highlands is so impressive the entire town was declared a UNESCO World Heritage site in 2008. That means San Miguel is considered so historically and culturally significant to the world its protected by international treaties.

San Miguel de Allende is found in Mexicos Bajío region, about 170 miles northwest of Mexico City.

Though San Miguel lies very near the Tropic of Cancer, its 6,200 feet above sea level. This elevation means the temperature is never too hot or too cold, never too wet or too dry. The daily mean temperature ranges from about 60 F in winter to 70 F in summer. Average annual rainfall is 21.8 inches . San Miguels perfect weather means there is no bad time to go.

As you arrive in San Miguel the cobblestoned streets take you closer to the historic town center, El Jardin The perimeter of El Jardin is made up of bars, cafés, and fancy restaurants, but the first thing youll notice is the Parroquia de San Miguel Arcángel on the squares Southside. The church dates from the 17th century, but its famous neo-gothic façade with pink towers was built in the 19th century.

San Miguel draws in wealthy folks from across Latin and North America. Youll find plenty of Europeans and Asians too, in the sleek boutiques or sipping craft beers and fine wines in trendy bistros.

Its now a fashionable place.

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