Many consider real estate the safest investment type: it delivers dependable returns across economic cycles. Moreover, you’re investing in a tangible asset that doesn’t usually experience the same degree of price volatility as other investment options.
However, what if you were to invest in real estate abroad? The prospect seems alluring, especially considering the rising interest in destinations like Dubai. The list of countries that welcome foreign property investors is growing rapidly, covering Turkey, Greece, and Egypt.
According to Investopedia, people now explore various routes, such as rental properties and house flipping. The appropriate strategy for you will depend on your confidence and experience in this area. However, evolving regulations and partnerships with consulting bodies now make the process straightforward for more interested parties.
These three essential guidelines will help you make lucrative overseas deals in real estate.
1. Not a Vacation: Assess Your Feelings About the Country
A few weeks of holiday may make you fall so much in love with a destination that you seriously start considering investing in it. If you have the required financial capabilities and the regulatory landscape is cooperative, there’s nothing stopping you.
Except you don’t want to struggle with the unpleasant aftermath of a decision you come to regret.
Many investors are lax about due diligence or restrict it to a country’s legal and regulatory environment. However, when you wish to buy property overseas, your research must cover much more.
- How stable is the socio-political landscape?
- Does it have an expat community you can turn to for advice and companionship?
- Do you feel comfortable with an extended stay in the location?
The US International Trade Administration provides Country Commercial Guides to help individuals and firms interested in doing business in a new country. They can be a quick starter to understand market opportunities and restrictions. You should also investigate the developer you are dealing with, checking their track record and market reputation.
That said, one of the most intuitive ways to conduct this due diligence is to walk around and meet other people. Focus on other investors like you and understand any issues they faced during different stages, such as purchase or construction.
2. Seek Support From Experienced Investment Partners
Another practical approach to simplify your overseas real estate journey is to partner with a trusted and experienced advisor.
In competitive, popular markets, such as the UAE, you may find it challenging to zero in on the best property for your financial profile. Dubai real estate investors can find numerous options to explore, from luxury apartments and standalone villas to retail spaces. The optimal choice for you will depend on your long-term objective, such as tax savings or an interest in rental income.
Many buyers also seek residency benefits that accompany property investments in some countries. Think: the Golden Visa program of Dubai and Greece.
A competent partner that understands the local landscape can assist you with selection and purchasing activities. They will help you find alignment with your underlying goals and assess whether this route will be future-ready.
RD Dubai observes that buyers with a local partner can also enjoy an exclusive negotiating position, along with assistance with visa and bank account applications. This lets you avoid administrative and logistical hurdles during the initial and subsequent phases.
3. Plan Above-Board Financing and Management
Overseas property investment frequently gets a shady reputation due to links to tax evasion or questionable financing.
In December 2024, the Financial Times noted that overseas tax evasion in the UK jumped 22%. Earlier this year, some media houses in India reported that the Enforcement Directorate was investigating violations of foreign exchange laws and money laundering pertaining to offshore assets.
Reports such as these affect the entire sector and trigger doubt among future investors. The most reliable way to avoid these circumstances is to maintain above-board financing throughout your investment lifecycle. You can do this by using regulated banking channels that keep an audit trail.
A general rule: Complex ownership structures (read shell companies) can be much more trouble than they are worth. Recently, Transparency International UK highlighted that up to £10 billion annually may be laundered through the UK property market. A secretive shell company is not a rabbit hole you need to go down.
Further, you should also establish a system, such as tenants and local managers, to keep your overseas property safe from local volatilities. For example, does it meet new environmental regulations to further energy efficiency? This area is prone to frequent changes, which developers and residents must monitor.
As a case in point, assess California’s recent exemption of infill urban development. The updated Environmental Quality Act protects new apartment buildings from the threat of environmental litigation. Proactive and vigilant developers can act on such regulatory changes quickly, keeping them from derailing construction projects.
Property investment remains a meaningful way to strengthen your financial standing, even in today’s turbulent global environment. It also has the additional advantage of making a foreign country much more accessible for business needs and your family’s future.
The key to making safe and lucrative deals in the overseas property market lies in research, support, and caution.
