Top 10 Considerations for International Buyers
This blog post was created using the works of Carolyn Delli Santi.
Clarify and find the primary objectives in order to filter and narrow down options.
2. Intended use
Discover how often the property will be visited to understand the intended use of the property.
“All real estate is local” applies, if not more, to other countries. Be sure to establish connections with people who can offer valuable assistance such as attorneys, notaries, inspectors, and local real estate agents.
4. Property Type
Know what the buyer wants. Newer homes typically have less charm and character, come with higher price tags, and potentially include taxes. Offer buyers a distinct set of trade-offs, especially for landlords.
5. Rental Potential
To determine whether a residence will meet an owner’s minimal rent income goals be sure to capture all related property ownership/rental expenses, including agent fees, taxes, insurance, and housekeeping services. Above all, make sure local laws permit owners to accept rentals and that the property is conveniently located in an attractive tourist area.
6. Legal Factors
Language barriers will often arise and can become a serious problem in legal documents. Before signing ANY documents, buyers may wish to translate all written documents using a translator. To attract buyers, sellers may be willing to conduct transactions in the buyers preferred language. Also consider if the contract includes related financial obligations (such as condominium/community fees), restricting local laws, and any restrictions on using the property for rental income. Buyers should review local laws to confirm that legal documents in a non-local language are legally binding.
7. Purchasing Costs
Numerous expenses will be added to the purchase price, such as attorneys, inspectors, appraisers and financial/tax professionals. Closing costs vary by country but can sometimes include sales/transfer taxes and title/notary services. If the purchase is financed, mortgage origination expenses will be added to the closing costs.
8. Continuing Expenses
If a property is financed, monthly mortgage payments will likely by an owner’s largest expense. Other factors are utilities, condominium/community fees, taxes, insurance, security, maintenance and travel. Important notes about utilities are that not all utilities that are available back home are automatically available abroad.
9. Costs to Sell (or Inherit)
Before entering into a purchase, buyers should have a solid understanding of their exit options and created expenses.
Questions to consider:
-When this property is sold can the proceeds be freely moved out of the country without taxation?
-What are the tax implications of repatriating an investment back to the home country?
-If a property moves into an estate, how will ownership and taxation be treated amount the heirs?
-Will inheritance/transfer taxes be avoided by including heirs on the deed?
Carolyn Delli Santi encourages planning ahead and seeking expert advice on the most effective way to handle such matters before signing a sales contract. Laws are always subject to change, making it essential to have a reliable source to guide the buyer through their term of ownership.
10. Other Factors
Will cross border transactions always involve an element of current risk that can enhance or detract from an owner’s related income and expenses?
Are there convenient and economic options between major transportation hubs?
Young buyers should keep this in mind if their long-term goals include retirement.
Emergencies can happen at any age
Does the country welcome and encourage foreign investment?
Are social services available to foreigners?
Do property owners gain special visa or residency status?
Is the overall political climate stable?
Carolyn Delli Santi is an AICR member and a licensed Real Estate Agent in both Italy and the United States. If you would like to reach Carolyn, you may contact her at +39 393 6460187.