International real estate can be a fun and exciting change of pace. Whether you are looking for a 2nd home, a retirement home or an investment, buying real estate in another country is an adventure! Here are a few thoughts I have for the process, having been through it myself. Keep in mind, this article just covers a few very basic items and is written from the perspective of a United States citizen, so international here will mean anything outside of the U.S. But, a U.S. based 2nd home may be a perfect international destination if you are reading this from another country!
Find Your Location
Just like the old adage says, the three most important things to look for in your international real estate purchase are location, location and location! Before committing to a purchases, I suggest that you take multiple trips abroad to narrow down your choices.
If you don’t have a particular area in mind and really don’t have any idea, or preference, where you want to buy a home outside of the U.S., I suggest a taking a few vacations to different regions first. This will help you find your favorite climate, culture and price range. Yes, that may add years to your buying process, but I think it is important. Of course, if you already have a region in mind, you’ve narrowed your list of potential countries significantly already.
Once you’ve nailed down a general region, I always suggest a few more trips. There are a surprising number of variables that come up across a region, or even within a country! For example, if you have decided that the Caribbean is the place for you, remember that there are many island nations there, as well as those on the Central and South American mainland. And each brings its own unique touch to the region.
Once you’ve narrowed it down to a country or even a city, make a few trips that reflect your future plans. If you plan to live there year round, make a few visits at various times of the year. Try to get a feel for the weather, the tourist seasons, holiday schedules, etc.
Here are a few location points to think about:
- Ease of travel. Everyone’s definition of an easy trip is a bit different, but take this into account if you are looking to purchase something that you will use often. Is it an expensive two day trip with connections in each direction, or just one cheap, quick flight? Or just a short drive? Whatever it is, make sure that the effort to get there doesn’t outweigh your desire to go.
- Language. If you aren’t at least conversant in the native language, and you don’t plan to become so, be sure that you are choosing a property in an area where your language is spoken by a lot of people. Or maybe you can find another county that primarily speaks your native language. For example, did you know that Belize, in Central America, has chosen English as their official language? There are a lot of online language learning sites out there, and learning a new language is a fun challenge! If you are interested in learning Spanish, I can’t recommend BaseLang highly enough! They provide one hour online classes with a native speakers from Central and South America for a set monthly price. It’s really helped me.
- Tourists and Expats. This may be somewhat driven by your language skills, but you’ll also need to decide if you want to buy in an area frequented by tourists or already having a large expat population. For someone buying as an investment and looking to rent their property, a tourist city or expat community may be exactly what they need. But, you may be looking for something a little off the beaten path, where the tourists and expats generally aren’t found.
- Lifestyle. Presumably, you are looking at purchasing an area that suits your lifestyle. If you are looking for quiet and relaxing by the pool, a resort area known for its party atmosphere may not be right for you. Do you want large American style grocery stores or are small local shops fine for you? Do you need a variety of formal dining options, or are casual spots more your style? As you narrow your choices, try to make sure that you are on the right track by visiting at different times of day and night and every day of the week.
- The local area. Be sure to check out the local area. Do some local exploring on your own. This is extremely important if your previous trips were to resort type properties. Resorts are great, but they don’t always give a complete picture of the local area.
You will want to familiarize yourself with the local real estate practices wherever you decide to buy. You local agent will be your main resource, but another good option is the National Association of Realtors – Real Estate Practices Around the World page. It doesn’t have every country in the world, but it’s a start. Let me know in the comments below if you know of any other resources.
Here are some other detailsto think about.
- House hunting. This can be hugely entertaining, or a huge pain in the neck! You’ll want to be very clear with your local agent on what you are looking for. If you have non-negotiable items, have a conversation with them up front to see how feasible they are and let your agent know if you even want to see any properties that don’t include them. Do you want security – either a system or a person, or both? Do you want a water filtration system? Is a pool a must-have? Let your agent know so you can find the property you love in the country you love.
- Form of ownership. This is an important piece to understand. Not every country allows foreigners to own property in their country, so they may “work around” that with a renewable 100-year lease. Sometimes there are limits on the size of the property a foreigner can buy. There may be restrictions on your estate’s ability to pass the property to an non-citizen heir. So many things! Be sure to get competent local advice from your agent and/or a local practicing attorney.
- Contract language. Just as you need to consider the local spoken language, it will be important to know the official contract language. Depending on the local customs and processes, you may be provided with English translations of important documents, but remember that the actual contract and other important papers will be the official language. You will want to work with a local team that you trust to ensure that you understand all of your transaction documents.
- Agents and Realtors. Not all countries have strict real estate agent licensing laws. For example, all states in the United States require a minimum level of education, licensure and supervision for real estate agents. Many other countries do not. The person you are working with today may have been driving a taxi or unemployed yesterday and decided today to start selling real estate. The government may not have any background checks or fiduciary standards in place for their agents. This is where you will need to do some research on your agent. While not a guarantee, many large real estate companies that you already familiar with have franchises in other countries. Again, this is no guarantee of good service, but franchises are usually held to a certain standard of conduct by their franchisor. Of course, a reputable local agent may give you the same quality of service.
This is a good opportunity to talk about Realtors. Choosing an agent that is a Realtor is another potential safeguard. Again, this is no guarantee of quality, but any agent carrying the Realtor designation has agreed to abide by the Realtor Code of Ethics. Here’s an interesting article explaining the similarities and differences between real estate agents, brokers and Realtors. In addition to partnering with a Realtor, you may also want to find one who holds the Certified International Property Specialist designation.
Finding an Agent
Of course, you’ll need a local agent to help with your transaction. In many cases a quick web search for your desired county + the words “realtor” or “real estate” will get you a starting point. Social media is a good choice, too. The National Association of Realtors has a member lookup tool here – just remember to change the Country field as it defaults to the United States.
I would be more than happy to help, as well. International real estate is fun for me, and I’d love to be a part of your team. I can help with just a simple referral or be more involved and help you interview and select your new agent. Just let me know how I can help.
Thanks for reading. Remember, I don’t know you or your specific situation. Nothing in this article should be taken as advice specific to your situation. If you have any questions, though, please get in touch – you can find my contact form here. Also, feel free to sign up here for my monthly “Neighborhood News” newsletter for real estate information on your local area.