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It’s no secret that foreign real estate investing has become a popular alternative in many countries. For the past few decades, it has truly taken off and is now one of the most fruitful investments you can make. But why not just buy property in your own country? While that is a viable option, investing in foreign real estate has many benefits.
Benefits Of Investing In Foreign Real Estate
Here are the main business-related benefits of investing in foreign real estate that you should know about.
1. The Right To Live And Do Business
When you already own a property abroad, you have the right to live and conduct business in that country. If you’re thinking of moving your company’s headquarters to a new country, this will save you a ton of trouble as well as tons of money. While each country has its own set of rules when it comes to this. However, Portugal property investment, for example, enables you to do just that as well as travel freely within the Schengen zone. Of course, a lot of EU countries will allow you to work if you already have a home base there, but not all of them do. When deciding which real estate market to explore, it’s always a good idea to see how easy would it be to do business in that country once you own property there. You never know when your company might want to branch out, and having the option to do so easily can never hurt.
2. Tax Benefits
In most cases, foreign real-estate owners are subject to the same tax rules as residents. However, some countries offer incentives to foreign real estate owners who meet certain criteria. In any case, finding affordable real estate – whether that’s in Canada, Spain, or China – is a smart move. Not only is it easier and cheaper to obtain these rights in most countries than you think, but once you have your foot in the door and start receiving your income there you’ll really see how beneficial buying real estate abroad is. With the right property in the right country, your business can take advantage of tax benefits when it comes to capital gains and depreciation. Depreciation in this sense refers to writing off the value of an asset over time for tax purposes. Capital gains are when you sell an asset for more than its original purchase price. When you own multiple properties, this is usually a common case with real estate. If it goes up in value over time, then the difference between what it is worth now and what you initially bought it for is your capital gain.
3. Retirement Plan
In most countries, owning a home is the best way to establish residency as well as build toward a stable retirement. When you’re planning your retirement, you need to make sure that you have a nest egg, and real estate can be an extremely valuable asset when it comes to retirement planning. This is especially the case when looking at foreign real-estate markets. In some cases, depending on your country of citizenship and/or residence, you’ll also be required to keep your primary residence for at least six months out of the year in order to qualify for certain social benefits like healthcare. That said, if the retirement conditions in your country aren’t ideal, owning foreign property can enable you to retire abroad and live your best life there without having to worry about being eligible for certain benefits.
4. Diversifying Investments
A crucial part of investing is making sure that whatever money you invest, it’s getting a good return on investment (ROI). If you’ve ever taken an economics or finance class in school, then odds are that your teacher tried to drill into you the importance of diversifying your investment portfolio over and over again. While not all investments are compatible, one way to diversify is through international real estate investment. With this method, you can invest in properties located all over the world with minimal hassle. The great thing about diversifying through foreign real estate is that you won’t have to worry about currency exchanges, either.
5. More Arbitrage Opportunities In A Global Market
If you’re not a big risk-taker, this benefit might be one of the most important ones. With an ever-increasing number of people around the world looking to make a move or a change in their life, there is always a market for foreign real estate. If you have money saved up and want to invest it into something that yields great returns, real estate is always a great choice. The foreign real-estate market has the potential to generate more arbitrage opportunities than most other markets. Whether that be income or capital gains, buying an apartment in Greece for half of what you paid for it in Italy can yield you some serious green.
6. Diversity Of Currency
Buying foreign real estate means that not all of your money will be in one currency. Instead, your income and gains can be in a variety of currencies depending on where you bought your property. If the US dollar is doing well and the Swiss franc is tanking, for example, then that means that you’ve gained money even if you haven’t sold or rented out your properties at all during that particular year. This is because the value of your property in Swiss francs will have gone up, and that counts as a capital gain on top of your rental income. And because you are not completely throwing your money into only one currency, it means that the investment is much less risky.
7. Hard Asset
Hard assets are valuable because they are not dependent on other factors, unlike paper assets which can be impacted by market prices. An example of a hard asset would be property or metals like gold and silver. With real estate investment in foreign markets, you get to enjoy all the benefits of owning valuable hard assets while still earning profit in the form of rental income, which makes it a valuable investment for any budget. The same can be said for real estate investment in general, but foreign markets tend to yield exceptional returns compared to the national average. If you’re looking for a good way to diversify your investments without having to deal with financial instruments, then foreign real estate might just be perfect for you.
Foreign real estate can open up all sorts of opportunities for those looking to improve and expand their business. It’s important that you do your research thoroughly before making any decisions about where to buy or what to invest in. Make sure the laws related to foreign real estate investment in the area where you plan to purchase are clear and suit your business goals well. After that, you can rest easy knowing that you’re investing in a market that has the potential to yield excellent returns.