9 Things to Consider When Buying Property Abroad
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9 Considerations Before Buying Property Abroad

I have always fantasized of buying an apartment, and at some point a villa, in Europe. I am sure that many of you have probably felt the same, wherever your foreign dream destination may be. However, a myriad of things must align, and a great deal of thought should go into a property purchase. Taking your dream to reality can be a complicated process. There are so many important things to think about. If you can answer to these 9 important considerations before buying property abroad, you will be much closer to finding your ideal place and ensuring a smart investment.

Understand the Area

This encompasses a broad idea, and really relates to all 9 of the considerations before buying property abroad. But it is very important. When most people vacation, they are usually relaxed, engaged in frivolous activities, and generally only see the positive side of a place. In contrast, when you live somewhere, or invest in a property there, it is important to look beyond the fun. Things can feel very different when you are not just traveling.

My Personal Experience Buying a Property Abroad So Far

A few summer’s ago, I was studying in a small town in Italy. The school was relatively small and intimate. Classes were filled with students from all over the world. We shared recipes, nights on the town, laughter, and fun, all while advancing our Italian language skills. It was romantic and set the perfect backdrop for long weekends on the beach.

I returned several times to both the school and the town, and really fell in love with the place. I was sure that I wanted to buy an apartment there. My Italian attorney contacted quite a few real estate agents on my behalf. Subsequently, I spent several months touring one property after another. But as time went on, I began to realize that as much as I loved this place, (and very much still do), it might be a better place to visit than live, for me. This revelation made my heart sink. Ultimately, I still think I made the right choice in not buying there, at least for now. Because, for all of the positives, there were also some cons that I just could not get past in the end.

Things That Made Me Love This Town

I bet that you can relate to the many things that drew me to this village, especially if you are considering buying in a small town as well. The vibrant summer population created the Euro-beach vibe that kept tourists hopelessly captivated, longing for another day. Endless hours of sun on beautiful beaches, and coastline carved out of rock, summoned diverse people from around the world. Popular dance music set the tone for the bronzed people wearing oversized sunglasses, undersized bikinis, and sipping Aperol, without a care. Ferries whisked vacationers to other equally saturated destinations on the sprawling blue transparent sea.

The small, but fantastic old area hosted colorful historic buildings, multiple shops, and restaurants with excellent cuisine. The welcoming locals greeted you warmly in Italian. Anyone would fall in love with the beauty and simplicity, food, language and people.

My Routine

During that passionate time, I was in class five days per week, most of the day. So, my primary activity in that town, was going to school. When I returned in the winter, I had a similar experience. I was back in class and had little time for anything else. In summer, if I had a few free afternoons or weekends, I was happy to hit the beach. With a free hour before studying, I’d relax at a cute cafe with an Aperol Spritz. Some weekends, I’d hop a train to explore a tourist site in a nearby town. Over Christmas, I strolled the holiday lights. They were beautiful. However, on my 6th night wandering the same path, I found myself wishing for something different to do. But people came to this town in droves to stroll these lights, and that was the activity for the month.

Please do not take this wrong. Remember, I loved that town so much, I almost spent my lifesavings to buy a property there. I so appreciated every little nuance that made up the heartbeat of that place. It was all very special and holds a unique space in my heart. It was just different now, without classes full time to occupy my day, I often found myself wandering aimlessly through quiet neighborhoods. I wanted to simply go out my door and be engaged in a new museum exhibition or a sprawling marketplace. Of course I still enjoyed the beaches, but I was looking to discover something more. It just wasn’t there.

Soul Searching is Part of the 9 Considerations Before Buying Property Abroad

Then, I had the grand thought of organizing large scale art shows and starting a concert series. I began to pick some of the locals’ brains. That is when I discovered that the town had a sort of unspoken ban on larger gatherings. It prevented many festivals and most live music concerts (which I hadn’t realized previously). It really explained a great deal. I had often wondered why I was always traveling elsewhere for outdoor concerts, especially when this town had such a cute piazza and a well known school of music.

The town itself was a year round place, with locals living there all the time. However, the foreign tourist population shrunk in winter. Visiting here without being in school everyday, created a very different experience. As primarily a beach town, with less focus on cultural activities and museums, I felt the need to venture elsewhere to find things to do.

Seasonal Changes

In the summer when the ferries were operating, it seemed easy to get around. I could find find pop-up art or concerts in nearby towns. Live music started late because of the daytime heat. Buses and ferries often did not run late enough to transport you back after the show, so you’d be stuck in that town overnight, unless you took a very costly taxi. If I were on vacation and doing this once or twice, maybe not such a big deal. However, began to wonder, “What if needed to do this everyday?”

During summer, the scenic ferry felt like an activity itself. It was so much fun! But in other seasons, when ferries fluctuated between infrequent to not at all, 30 plus minutes on the train to get to another city, felt like a hassle some days. Wandering around town on my daily passeggiata was dreamy, but I passed the same locals, stores, and scenery repeatedly.

A Change of Heart

It was easy to meet people and for them to meet me. This part I really loved and still miss. However, once I completed my classes. and was not occupied in school everyday, I saw things differently. There was still so much that I cherished, but my days and evenings did not feel as full or purposeful. I wanted to pop out my door to a museum, attractions, or to live music, without having to hop on a train.

Of course there were one or two small museums, but not places you’d visit more than once a month. So, I found myself regularly saying that I just wished there was a bit more here. I wasn’t asking for much; One large museum I could frequent, or anywhere with local music at night, an occasional festival, or an open air marketplace. With these things come socialization opportunities, but also more diverse people and dynamic thoughts. This is not to say that no one in the town was interesting. On the contrary. However, it was predominantly a working town based mostly on the major port there. The focus was on work and family. A diverse subset of people with similar intellectual needs to mine, was more important to me than I first realized.

I was torn because I was all set to buy an apartment there. I was so excited and happy, and the town started to feel like home. But suddenly, I also felt unprepared. Like I hadn’t thought it all out. Maybe it felt one way as a student, but another now. It was disconcerting to be so very sure, and simultaneously feel all of these doubts wash over me, like a slowly moving shadow.

Different Expectations

And then there were the beaches. During the summer, they were small but spectacular with the warm orange sun glistening on the blue sea, draped by dramatic coastlines. It was something out of a fairytale. But in the winter, it was well… very different. Unfortunately, the beaches were not considered a winter thing there.

In winter, sticks and branches were piled haphazardly on the small beaches. I assume that this was done in order to prevent flooding. Unsightly, and mostly unusable for sitting, reading, or walking, some locals thought the beach to be a place to put their winter garbage. Opposite to summer, it seemed that during a good portion of the year, beaches were abandoned. It was disturbing to see this. This may not be a big deal in a city like Rome, where beaches are not the primary draw. However, for me, they were a major asset of this town.

Contrarily, there was a promenade that ran all along the sea. It was lively and in excellent condition, great for exercise and strolling. But again, use of the beach was not a possibility, just the promenade park benches. For a tourist, like myself at one time, this was more than sufficient. You’d think nothing of it on a short term visit. You’d be in awe of the sea and captivated by the romance of strolling on the promenade. However, to invest in an apartment in a beach town, I started to hesitate.

The Apartments

Additionally, most of the older characteristic buildings seemed to have some issues such as mold or deteriorating concrete. It seemed that even if I renovated my apartment, there was not much of a home owner’s fund amongst the individual buildings. So in many buildings, there were no means in place to take care of the public spaces, edifices, roofs, pipes, and balconies. I think I would have been more comfortable buying a villa in the area versus an apartment. With a single stand alone property, I could control the updates and renovations as I deemed fit. But I was looking for an apartment.

Status of the Apartments

Many of the apartments in the most desirable parts of the town were along the coast and in the historic center. A majority were being run as vacation properties, rented by the night or week. This drove prices up because it was assumed that you were buying the property as a rental investment, not to live.

Additionally, because of some politics in this specific area, an influx of corporates bought the majority of the buildings for a tax break. It caused the prices to become astronomical for the apartments in their current conditions. Nearly any local people living in these buildings have had them for generations and paid nothing close to what is now being asked. Investing a large amount of money here started to feel unwise. Especially when I could rent an apartment on VRBO for less than $100 (US) per night and stay for a month or two in desirable seasons. That would cost considerably less than buying.

Admittedly, I am accustomed to a certain standard of living, but I understand clearly that different is not necessarily better. I know that there is give and take everywhere. I also understand that some of the things that do not work well there, add to the charm and attraction. However, the monies being asked to buy just did not seem to nearly match the economy of the town.

The Point and How This Relates to the 9 Considerations Before Buying Property Abroad

Ultimately, I still love that town, will visit it repeatedly, and even inquired how I could help clean up the beaches, but after all considerations, it just was not the right place for me to invest at the time. The point of sharing this story is to let you know that I was so sure! I thought I was 100% in, and thankfully, I realized it was not quite right before buying. It is very easy to become enamored by a sexy vacation spot, but it doesn’t always mean it is the right place to live. So, take your time and really think about what it would be like long term. And of course, answer to yourself the following 9 things to consider before buying property abroad.

9 Considerations Before Buying Property Abroad

1. Activities Available in the Vicinity

  • Are there services nearby? (Bars, restaurants, markets, stores, a hospital)
  • Do the available services match your current and near-future needs?
  • What things are there to do in the vicinity? (Museums, beaches, hiking, outdoor markets, live music, sports venues)
  • Are the activities in line with your interests?
  • Can you walk to some or all of the attractions? If not, how complicated is it to get there?
  • Are there special events celebrated nearby and regularly, such as festivals, religious holidays, Carnival, etc.?
  • Are there live concerts?
  • Is there a theatre?
  • Is there a stadium or local sports team?
  • Do the area’s attractions provide the possibility of a social network, such as the ability to join a museum with member events, or festivals that draw out the community at large?
  • Is there a regular outdoor market?
  • Are there beaches, mountains, parks, or hiking areas?
  • Is there an ocean or lake?
  • Are there areas where the town gathers regularly such as piazzas or squares
  • Aside from your personal hobbies such as painting, gardening, or exercising, can you picture how you would fill your days?

2. Demographics

  • Is the town population diverse in age?
  • Does the average age of the area’s folks match yours?
  • Are there diverse religions and cultures represented?
  • Is the majority of the area’s population educated?
  • Are many of the locals professionals, farmers, port workers, in the hospitality industry, or unemployed?
  • What language(s) are spoken?

3. Politics

While you may not be voting, politics of an area can affect how you relate to your neighbors, and possibly the friendships you choose to make. While it is important to have diverse thinking, is the area predominantly of one mindset, and can you relate to it? Politics can affect progress, crime, availability of arts, public areas, medical services, economy, aesthetics, tourism, diversity, laws, and many other things (including your property investment). Both local and national politics should be considered before buying, to be sure that you are okay to some extent with the realities of life that may affect your happiness and your investment.

  • Is there political instability?
  • Is there diversity in thinking?
  • Are you comfortable withe the overall political situation in the country?
  • Do you have an understanding of both the local and national politics surrounding your property?

4. Dangers/Safety

  • Is the area prone to environmental hazards such as flooding, hurricanes, tornadoes or earthquakes?
  • How much petty crime is in the area; Is it safe to walk the streets and ride public transport, especially at night?
  • In the area, is there organized crime?
  • Is the area prone to terrorism?
  • Is religious conflict a common issue?
  • Are there frequent incidents of political unrest?
  • Would you feel comfortable leaving your property uninhabited for periods of time?
  • Does the area border a known danger or war site?
  • Is the building or property secure? Is it a gated community?
  • Is the property in a good neighborhood?

5. Transportation

  • Are there trains, buses, trams, or ferries in close proximity and do they run regularly?
  • Does the available transportation connect easily to other areas?
  • Does a main highway exist and create easy access from the town to other areas?
  • Is there a nearby airport?
  • Does transportation operate regularly or is it seasonal?
  • Is public transportation known to be reliable?
  • Are there public parking areas?
  • Is the area pedestrian only?
  • Does the property you are looking at have private parking included, or for rent/purchase?
  • Is the property’s parking covered or exposed to the elements, and is it secure?
  • Are you allowed to own and operate a vehicle? Note that some countries require you to be a resident or citizen to own a vehicle, or in some cases, to even operate one.

6. Climate/Weather

It is important to understand the overall climate and weather patterns of the area. This affects more than you may think. For me, most importantly, am I buying in an area that has a regular population with services open year round? Some destinations that are fabulous and bustling in summer, reduce to a handful of locals in winter. In this case, would that be okay for you, or would you rather just visit in summer and possibly not buy there?

Also, are you a person that absolutely needs 4 seasons, or hates the cold? It is important to visit at various times of the year, or at least have a firm understanding of the expected climate. Again, even though you may love an area at the height of its popular season, it may not be a great fit at other times. Some places are better to visit than live, unless you too are willing to be seasonal.

  • Does it snow?
  • How much does it rain and how often?
  • Are there huge temperature swings day to night?
  • Is it unbearably hot or cold?
  • Are there 4 seasons or is it a temperate climate all year?
  • Are there often weather-related issues, such as being able to reach your home, or is your property prone to danger (from earthquakes or flooding)?

7. Land Ownership, HOA, and Taxes and Fees – An Important Factor of the 9 Considerations Before Buying Property Abroad

Owning Land

Note that in some countries, there are laws that you may not know to consider. For example, you may be able to buy a home, but not the land that it exists on. In this case, the land may be technically leased from the locals and have an expiration date. In other cases, you may not be able to own property unless you are a citizen or legal resident.

Another consideration when buying property abroad is to be sure that the seller really has the right to sell you the land and that it is really theirs to sell. In many countries, land ownership is passed down through many generations. Sometimes people find out that they have the right to land that they did not even know existed. This sometimes happens when a person is separated from their family or country and years later go in search of it.

Jenny’s Pro Tip: *For this reason, I highly recommend using the services of a local or international attorney, notary, or other legal service that can be sure that the deed is free and clear to buy. Additionally, in most cases, any structural or major problems should be disclosed to you prior to purchasing. Also you want to know of any financial issues such as liens, the HOA being out of money or having a large assessment planned, and any associated insurance requirements.

HOA (Home Owner’s Association) or Similar

An HOA (or similar), is a group, usually composed of residents of a building or community, that makes decisions financially and otherwise that have to do with the upkeep and aesthetic of the asset. Each owner of a building or community is generally a member of the group. The association usually has a board composed of some volunteers of the property owners.

The group usually has an existing legal document that explains what they can do and why, and generally includes a budget of things in the community that may require money, and then how the money is spent. These expenses are generally gardening, building exterior and structural maintenance, and improvements. In a community or building with an association, each owner usually has a known amount that they must pay into the pot each year. Projected or unexpected property expenses are often covered by the money that has been put into the pot.

While it is enticing to buy an apartment that has very low HOA dues, it can also be a warning sign. The issue with low payments is that if a problem does occur, there may not be sufficient money in the pot to pay for the repair. Some residents may not be able to afford to split the costs of repair when needed. A healthy sum of money at all times in the budget helps to ensure that both emergencies, and regular maintenance, will be carried out as needed. This helps to avoid living in a community with peeling paint, broken elevators, falling balconies, leaking roofs, and so on.

Taxes and Fees

There are many types of taxes to think about. Financially, this is an important part of the 9 considerations before you buy a property abroad. Not all types will apply to your situation, but the important thing here is to understand any fees that you will owe in order to budget correctly when buying a property abroad. There can be property taxes that you must pay each year to the city or country as an owner. There may be taxes over and above the listed price of your property, like a sales tax. Some countries require the use of a notary or legal service which always has a fee attached.

Additionally, there can be expenses related to your property for utilities, such as garbage collection, sewage, and water usage. Other fees may include the HOA, or community fees for shared facilities such as a gym, park, or pool.

Taxes may also vary based on whether you are a citizen, resident, or foreigner of the country where you are buying the property. They may calculate taxes differently based on your income, whether it is your first or second home, whether the property is considered agricultural or luxury, and if you are going to rent it out. There are many considerations that affect taxes and fees, so be sure to understand what you are committing to financially.

Taking a Mortgage

If you take a mortgage (and are able to get one), there are also fees associated with that. Those fees will vary dramatically based on your broker and/or lender as well as your personal financial situation, and the state of the economy. Know that they will almost always include a broker fee, a legal fee, a property insurance policy, a life insurance policy (to guarantee your loan will be paid off in case of death), a bank account (usually with a monthly fee and a set minimum), and so forth.

9 Considerations before buying property abroad

8. Residency, Citizenship and Visa Options and 9 Considerations Before Buying Property Abroad

Depending which country you decide to buy a property in, there are various rules regarding your options and how long you can stay. In many countries, a general tourist visa gets you anywhere from a one month visit up to 90 days. Other countries might let you stay for 6 months. If you are working or studying, your visa may be extended. Everyone’s circumstance is different.

It is important to recognize that just because you buy a property, it does not usually give you the right to stay in the country indefinitely. It also may or may not allow you to buy a car, operate a car, receive local discounts, or utilize medical services as a local. Each country is different, but generally all major benefits depend upon your status as a person abroad: resident, citizen, or foreigner.

Residency

Some countries will allow you to take residency, which means you can usually stay indefinitely and have access to services such as medical, but you will also be paying your taxes there, as a local. This can be complicated if you own property elsewhere, sell a business, have substantial financial means, or if you are an American citizen.

Note: If you are an American citizen (and wish to remain one), you must also pay US taxes. The USA is one of only a few countries that require you to pay tax as a citizen, no matter where in the world you reside.

These taxes could possibly be offset with a good international accountant, but just know that it may not be as exactly as you thought.

Citizenship

If you do not already have citizenship in the country you are buying property in, you may or may not be able to get it. It is easier in many countries to become a tax paying resident than a citizen. A few countries have offers that if you make a property investment, in or above a specified amount, you may be entitled to citizenship. Many of these deals also come with restrictions, such as having to live in the country for a certain number of years.

Citizenship is a huge benefit. You can stay in the country as long as you like, with all benefits entitled to anyone in your position, as a citizen of that country. You can also be a citizen living abroad, meaning that you spend less time in the second country than is required by law to be named as a resident. Therefore, as a non-resident citizen, you pay your taxes in your home country only usually.

However, there are normally restrictions on how long you can stay at your property within a year, or consecutively, without triggering residency (and therefore paying taxes there). So it can still be limiting. Advantages may be the ability to drive or buy a car, receive local discounts by showing your passport, and most importantly perhaps, the feeling that you are not a tourist, but really belong there.

Visa Options

If you are not a citizen, most countries require some type of visa. Visas (unless full resident visas) usually have some restriction on how long you can be in the country consecutively. The point here is, that it is very important to consider all of this when purchasing a property abroad, because you cannot just assume that you will be able to live there full time. Perhaps the rules of the country may cause you to second guess where you want to buy abroad.

9. The Condition of the Property and the Last of Our 9 Considerations Before Buying Property Abroad

I also think it is important to consider the condition of the apartment, villa, or property.

  • Meaning, does the home need renovations? If so, how extensive are they? How costly will it be? How long will it take? Will you be able to use the place while it is going on?
  • Does the home come with appliances? Are they in working condition and suitable to your needs?
  • Is there an outdoor space? If so, is it maintained or do you need to tear out trees, hire a gardener, etc?
  • Did you factor any necessary renovations into your overall budget?
  • Is the home furnished?

There are many factors to think about, but as I have been going through this process, these are the 9 Considerations Before Buying Property Abroad that I felt most affected my decisions. I hope this gives you a great deal to think about and helps you wisely go from your dream property to making it a reality.

Please feel free to comment on this article or on our social media, on any other things that have impacted your decision of which property to purchase abroad. Your insight will help others too!

See also Jenny in Wanderland, How to Choose a Vacation Rental.


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2 Comments

  • Susan Saltzburg

    An amazing article. So insightful from first-hand experience.. Manycinsiderations that I never would have thought of – so easy to be swept away by the romantic notion of buying in the moment. I will definitely share with others!!

    • jennifer

      jennifer

      Thank you for your feedback! Buying a home anywhere can be challenging. In a foreign country, it is a whole new level, but I’m sure, well worth it!

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