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The Pros and Cons of Buying a Property Abroad as an Investment

If you’re interested in buying property abroad or an investor looking to expand your portfolio, you might be interested in some tips and tricks for making the best purchase.

 

 

As with all investments, there is some risk when investing in property. However, you can minimise this risk while maximising profit by making an intelligent investment. A smart property investment generates lucrative returns and can provide you with a reliable stream of income throughout your time owning your property.

If you’re curious about buying an investment property abroad, here are the factors you should consider. 

 

The Pros of Buying Property Abroad

 

Property is a substantial, long-term investment and you can mitigate potential risks by having other investment classes across your portfolio. 

One of the numerous perks of buying an investment property abroad is that there is less volatility than you see in other financial markets. In contrast to the stock market where buying and selling shares happens in a second, property investment has proved relatively stable.

 

 international investing pros and cons

And don’t forget that there’s always a demand for property. Housing shortages, global population growth and increased tourism in Costa Blanca are some of the causes contributing to this ever-growing need. Buying property abroad, especially in quality locations like Costa Blanca, means you’re making an intelligent investment in something that will always be an asset.

Another big bonus is that you can claim inheritance tax when you leave your property to younger generations if you invest in property during your retirement. If you decide to pass your property onto anyone before your death, the law views it as a gift and there won’t be any inheritance tax if you lived in the property for less than seven years before giving it to someone.

Most people see retirement as the time to enjoy the luxury of more free time and the freedom coming from your golden years, travelling or taking up a new hobby. If you’re buying property abroad to let, you’ll also yield the benefits of an additional monthly income that could give you even more financial freedom

The benefits of property investment are:

  • A stable long-term investment
  • Consistent demand for property 
  • Inheritance tax benefits 
  • Buy-to-let financial incentives 

 

The Potential Risks of Buying Property Abroad

 

A critical caveat of stepping into the property market is that you’ll need a substantial amount of capital to enter. When it comes to buying property abroad, there are no quick cash-out options and you must factor in the uncertainty surrounding buy-to-let opportunities in your decision-making process.

Why do you need to think about this? Well, unlike other assets, a property takes considerably longer to sell. If you find yourself in a situation where you need quick access to your money to invest elsewhere or to take care of unforeseen circumstances, you might run into some delays and difficulties.

Plus, most new investors forget to include the hidden costs into the initial purchase price. These associated costs, such as repairs, compliance certificates, building and pest inspections and more are just some of the things you should examine before making your final decision.

If you’re thinking about buying property abroad for buy-to-let purposes, be aware that evicting unruly tenants is a lengthy process. And if your home stays empty for an extended period, you may not turn the desired profit. 

To sum up, the risks are:

  • Needing a lot of capital to enter the market
  • Additional costs beyond the initial purchase price
  • Taking longer to sell, making it difficult to access your money quickly
  • Letting troubles and an home empty for unexpectedly long periods

 


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

 

 

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