International REI i.e. Japan, Malaysia, Philippines etc
I would like to buy property in international markets but I'm curious, is it difficult to buy multifamily homes as a foreigner? Is it a bad idea? Would buying single family homes be a better investment for hold and renting out? Do I have to know the language? Would love to hear your thoughts and experience with this.
Is it difficult to buy multifamily homes as a foreigner? What does difficult mean for you? It depends on so many things but just understand that you won't be able to replicate the typical multifamily strategy overseas.
Is it a bad idea? We don't know what your objectives are. You wrote that would like to buy property in international markets. Do you know why or is it just an idea?
Would buying single family homes be a better investment for hold and renting out? Again, it depends on your objectives. It's certainly easier and might be your only option in many places.
Do you have to know the language? Not necessarily but it helps.
I've shared my experience in investing internationally through more than 1,000 posts. There might be content of interest to you there.
I don't believe you can buy property in the phillippines without being a citizen.. the workaround I've heard people do is lease the land for 100 years and then build structure on top of it.
@Mike Lambert
Sorry for my general questions, my reasons for international markets is because I want to be able to create a passive income while being able to travel to these different countries as a perk. That is my current goal.
I'm in the US and I have about 70k saved up and I thought about getting experience with a multifamily homes here first to get my feet wet but I'm wondering is it worth trying in a different country knowing that's what I want in the long haul.
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@Christina P. No reason you can't buy what you know, where you know, where you know the laws, where you may have access to leverage. Develop your passive income here and use it to travel.
Every country is different. Some allow foreigners to purchase, some don't. Some limit foreign buyers to certain districts, or types of properties like condos.
Most probably don't have financing or leverage for investment properties for foreigners. So you're looking at cash buys in many cases. HELOCs in most other countries don't exist.
One thing to think about too is currency risk.....so many companies right now reporting lower earnings do to big swings in exchange rates.
There is probably opportunity somewhere, but your odds of success probably go up exponentially if you know the country well, know the area you're investing in well, have some knowledge of property law and landlord/tenant law, and know the language well.
There's been some posts on BP for example about buying in Brazil....do you know Portuguese, do you know rental law in Brazil, can you evict someone, do tenants have rights, can you find an English speaking lawyer easily and affordable to handle your eviction and keep you updated? How long do those take? Is it common to have property management there? Do the property managers speak English? Does Brazil law allow electronic signatures on leases? If you have to sign in person for example in front of a Brazilian notary, is it cost effective to fly back and forth to sign documents?
Just to give you an idea of the headaches, I sold a US property for US/British citizens who were living in UK earlier this year. When they sell they have to get in front of a US notary. Embassy in London only had two days a month on the schedule for the notary and something like $400/person to the notary to witness two peoples signatures. The month they needed to close was already booked, plus they don't live in London. So alternative was to fly here for one day or try to go someplace else in Europe to an American embassy to sign. In either case, what happens if the buyer's lender is delayed or title is delayed....one week or two weeks or 30 days. Will you fly twice, will you have a non-refundable ticket. Do you go ahead and fly and then stay in a hotel for 14-30 days....and all that is the easy complications. There can be plenty others.
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Quote from @Christina P.:
I would like to buy property in international markets but I'm curious, is it difficult to buy multifamily homes as a foreigner? Is it a bad idea? Would buying single family homes be a better investment for hold and renting out? Do I have to know the language? Would love to hear your thoughts and experience with this.
I used to invest to place that you described.
Pro: easier tax rules when selling
Cons: currency depreciation , lack of future price estimation ( bit random ) and has to be cash
Hi Christina! I don't know a lot about actually investing in Asia or the Pacific Islands, but my family is from the Philippines. I've got a cousin, who is a lawyer in the Philippines, and he may be able to answer some of your questions. Let me know if you'd like his contact information.
You bring a lot of interesting theoretical points so I'm going to comment from the practical side and the reality is different. To illustrate my point, there are hordes of Americans who have bought property in Mexico. Over the course of my investing career there, I've met so many of them over the years I probably have a statistically representative sample here. I can't tell you that the majority doesn't speak Spanish or has no clue about the local laws and can't care less about those things. And many make boatloads of cash. They just surrounded themselves with the right people. They have a good and trustworthy lawyer who speaks Spanish obviously so they don't have to know the language or the laws. It's the same in Brazil or anywhere else. Don't get me wrong though. Of course, knowing the language and the local laws are pluses if you do.
I have educated many here by sharing my experience and knowledge about investing in Mexico through hundreds of replies to posts. Yet, I readily admit that I have no clue about the long-term rental laws. But that's simply because I have no interest in renting long-term there.
As to the paperwork issue, I'm not sure it's a good idea to generalize one single situation out of millions. It's interesting to know all the things that can go wrong but the problem is that it often leads to analysis paralysis and that's often what stops people from investing in real estate, even in their own backyard.
I have to go take delivery of properties in Mexico and my investor-partner can't make it. As a result, I need to get an apostilled power of attorney and Canada doesn't recognize The Hague convention. This is annoying and slows down the process but I don't really mind. I have a good deal and I rather do that than get a crappy deal in my overheated home market. I don't have to book an additional flight for this but it wouldn't be the end of the world if I had to.
This being said, you do very well to make people realize that, investing overseas isn't just copying and pasting what you do in our home country. Especially if you don't have relationships to rely on, it's important to educate yourself and do your due diligence, and you're doing a great job reminding people of that.
I guess the conclusion is that this all makes for a useful and interesting debate! :)
People can read the different arguments and make up their own mind. I guess that's what the forum is all about after all.