Know the Rules and Regulations before Investing Abroad

By
Real Estate Broker/Owner with Turn Key Real Estate 31RA0874656

So you’ve now decided to purchase a vacation home or condo in a development or hi-rise outside the U.S. Maybe you are thinking of some exotic location like Costa Rica, where 200,000-plus from the U.S. and Canada and expatriates from other countries have decided to buy and eventually end up there to retire.

While the dollar is still somewhat strong in comparison to other currencies, it just might be an excellent time to consider your purchase. Moreover, interest rates have gone down once again to less than 3 percent, so possibly refinancing your home to take out additional money for the purchase might make a lot of sense.

If your current interest rate is at least 1-2 percent higher, then it will save you money as long as you stay in your home five-plus years or more. However, you will need to see what the total cost of the refi would be as you will have a payback period of those costs until you can really take advantage of your lower rate.

Obviously, your current business or job income, credit scores and debt/income ratio are the key factors that will determine your borrowing power and interest rate. Another consideration is how much longer you will be living in your home.

The younger your children are the longer you potentially might be staying put at least until they graduate college. So borrowing now with these historically low rates will be to your advantage.

Conversing with a qualified professional mortgage broker will provide you more insight into whether or not refinancing will work for you. But first, you must think about the financial strength and footing of your business and how secure is your job and position.

Amazon and other internet businesses have had a marked effect on how we have purchased our groceries and necessities and the adverse effect on a vast amount of businesses throughout the U.S.

Although infection rates have come way down, we are still in a COVID-19 pandemic environment. The Delta hybrid virus is having an effect on certain parts of the U.S. and other countries, too, with infection rates spiking and increasing over the last month. You have to tread lightly when determining whether you have the continued and disposable income as well to buy your vacation/potential retirement home.

On the positive side, my professional opinion is that you probably will have an excellent opportunity to purchase a property at a much more discounted price and value now as opposed to if and when the viruses subside.

Predicting that happy event is anyone’s guess and at this point is surely an unknown.

The following countries do not allow foreigners to own property or make it next to impossible to do so, such as:

 Vietnam
 Greece
 Thailand and other countries so check out the policies of any country before doing anything

There are many other countries where Foreign Nationals can own property and the investment is somewhat of a solid bet, such as:
 Turks and Caicos
 Mexico
 Barbados
 Anguilla
 The Cayman Isles
 Bermuda
 Costa Rica
 Canada
 Philippines
 United Kingdom
 Spain
 France
 Italy
 Panama
 Bahamas
 Germany
 Brazil
 China (you must have worked there at least 1 yr and are purchasing for self use)
 Belize
 Colombia
 Jamaica

One must read and learn what the rules and regulations are so you will become more well-informed prior to looking for a property.

Hiring a local experienced and knowledgeable Realtor who will be able to provide you all the information needed to purchase will be to your advantage and benefit so fewer mistakes and glitches will occur.

Having the needed and necessary information will back up whatever the agent(s) convey to you so you will be that much more informed in minimizing and eliminating issues, losing money and time.

Also, hiring a local attorney with a good reputation and reviews will back you up by providing you legal representation, again to minimize potential issues that surface and to assist in solving problems.

Comments (3)

Matt Brady
Finance Of America - Del Mar, CA
One of San Diego's Best Lenders

Nice post, You've made me think about about looking for a second home in Montenegro.

Jul 28, 2021 06:07 AM
Philip A. Raices

Hey Matt, thank you for your compliment.  FYI, one of my supers in one of my buildings is from Montenegro, so if you need any assistance in the best opportunities  to purchase there, call me. (888) 355-1385

Jul 28, 2021 06:10 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Phillip, when I took a vacation to Ireland, I INSTANTLY wanted to buy a home there.   The locals advised me to come back during the rainy season, and also told me about the squatters that would take over.

Jul 28, 2021 10:25 AM
Philip A. Raices
Turn Key Real Estate - Great Neck, NY
1 of the Most Knowledgeable Brokers on the Net!

GM Joan, 

Every country has its challenges and issues.  Listen to the locals and generally, after veryifying their suggestions and info then pulling the trigger will make much more sense, doesn't that make sense?  I hope so!  In my area, currently, I suggest in a seller's market to wait til the first snowfall and go out the very next day as most do not and then the motivated sellers, just might raise their heads and buyers just might have a better shot @purchasing with the least amount of competition from the insane and crazy bidding wars!  Somewhere this entire current euphoric atmosphere will settle down, as either prices continue to escalate and/or the interest rates go up in order to cool off the demand and once that begins, inventory will slowly increase until the competition amongst listings will also assist in leveling off and reducing prices and then a buyer's market will possibly emerge.  However, due to the incredible demand from the additional 2+ million capable buyers entering the market yearly and most builders who had previously slowed down their new construction from the 2008 bubble through 2015, reducing available inventory as the demand had been increasing from the bottom of 2011.  The lowering of interest rates and on top of it all the Covid-19 Pandemic put a kibosh on the first 1/2 of 2020 where I was off from the end of March-June 10th as Gov Cuomo sequestered all of us in NYS.  However, the end of the second quarter til today the bull rushed out of the stable and our pent up demand in every market exploded to what we are currently experiencing today!  For the foreseeable future, this bull will be melting up until  prices get to a certain tipping pointing, interest rates increases will aid in increasing inventory and then demand will cool off.  So until these progression of events or G_D forbid a catastrophic even were to occur, we are not done by any stretch of the imagination.  I tell all my clients that waiting for prices to cool off will not be to their advantage up to a certain price point because the cost based on increased interest rates, again depending on the price of the home, will be much greater than  than buying today, at what many think are inflated prices, even if you have to go to asking or considerably above the asking  price.  One must calculate different scenarios and price points to analyze whether waiting will be more beneficial based on your specific budget and financial qualifications as opposed to purchasing today.  Also, what will come into play is how fast you can and will pay off your mortgage, which could make a difference if prices come down enough to make your future purchase worth waiting only and only when the price differential makes sense!

Jul 29, 2021 04:28 AM