All Forum Posts by: Account Closed

My properties are at a huge distance (in another country, 24 hours to fly there). I do a combination of #1 and #2. I have a PM who handles month to month rent collection. As a back up, my mom is my eyes and ears. If there are major repairs, if the PM needs a quick decision on something. This works really well. Sure, I pay 10% every month but the properties are paying for themselves and I don't need the income I get from them for living expenses. What I do want to be sure of is that I have a quality product (to attract the best tenants) and that the properties get managed well over time so when it does come to selling one day, I have assets that are worth more than I paid for them. 

If the owner has a no-smoking building, this should have been specified up front and a stipulation included in the lease. My sense is that when the complaints started about the smoking, then they tried to convert the building to smoke free. In which case, the new tenant has some rights here. They can't be forced to accept a new condition to their lease and if the owner wants them to move, the owner may have to cough up for their expenses. $4000 sounds a bit much. I'd ask them for copies of quotes and also maybe you can get your own quote to verify if that is the going rate.

If the building is already zoned as multi-unit, whether its condo style or other legal form, then just call a realtor and list the property. If rooms/units/space in the building is leased out by the owner without this, then there maybe a legal process to get the building subdivided. Otherwise, the building can be sold as a whole. As a real estate lawyer and/or a realtor.

My suggestion: Start with the end in mind.

Start looking at properties, go to open houses. Find out what a property that fits your description will cost you. There will be properties in many different price ranges. What kinds of neighborhoods do you want to invest in? What kinds of tenants do you want? Do you care if the property is near to where you live now or you're willing to go further afield. There are a hundred questions to answer before you can know how much money you should have in savings.

Another avenue of learning/research is to look at financing options. Learn about types of mortgages, current interest rates, etc. The type of loan program you go with will determine if you need 5% or 20% or another amount.

Now that's called sweat equity. Its priceless. Good job!

Huh? They sound like nice people but I'm still going to go with "no". At most, if you feel generous, is to say you can hold the rent at the current rate for about 6 months before increasing it as you had planned to do. Say that you are very grateful for them being such great tenants.

Welcome @Maxwell Jacas .

Check out Darren Sager, he sometimes organizes real estate investment club meetings here in the city. There's usually an interesting speaker and interesting people to meet.

Congratulations! It looks like you did good. I'll wait for the more seasoned guys to chime in if you missed anything. I'd be interested to learn also.

In the end, I didn't have to pay the tax and got my money. So I did make money on the deal. If your partner is a citizen of the country, I would imagine you'd get around a lot of the hoopla. Your partner, as a "local" would probably know something about "how things are done" in that country. That can be a tax, legal and practical help. The question is whether you trust your partner enough to put everything in his/her name and that you do not appear in any way to have a stake in the deal.

Another issue to thing about is financing. Another problem I encountered when purchasing a property in the US is that I didn't have employment record, W-2, social security number, credit score, etc. No American bank would even think of lending me money to buy a house. I had to get a social security number, I had to build up my credit over at least a year and in the end, I was able to get a mortgage through my employer's credit union that had dealt with foreigners like me before. I had to give them proof from my employer as to my employment status and the length of my contract, etc. But other than that, none of the regular banks would loan me money.

Something I've seen posted here somewhere - also be aware that a US bank will probably not loan you money to purchase property in another country. For example, how can they appraise the property? How can they trust that you won't just disappear and stop paying your mortgage? If you did stop paying your mortgage how could they foreclose on the property? The exceptions are banks that have partner institutions in other countries perhaps.

Of course, if you have oodles of cash lying around and can pay cash....

@Ceril S. 

I would make sure of the tax side of things. Its almost never a problem to invest in a country, but there are nearly always annoying taxes.

For example: I invested in a property in the US. I had a job in New York for a few years. Figured I'd buy the property, fix it up, live in it and when I was thinking of transferring out of the US, I'd sell it. As I said above, buying was not a problem. Fast forward three years and I was ready to sell and put the place on the market. The US has something called FIRPTA which is the "Foreign Investment in Real Property Tax Act" and I was required to pay a tax of 10% of the sale price of the home. I got a waiver based on the fact that I lived in the property as my primary residence. I had a CPA help me on this one. Another factor was that I had to wait 6 months for this waiver. For six months after closing my money was sitting in escrow with my attorney until I could produce the waiver letter. The law actually requires the buyers attorney to hold the money in escrow but we signed an agreement between buyer, seller and our respective lawyers that my lawyer could manage the escrow.

Just to give you an idea of what you may need to be aware of up front. If I had just bought the place as a rental property and hadn't lived in it, there would have been no way out of paying 10%, not just of my profits but of the total sale price of the home. Pretty much every country I've lived in has some sort of tax on foreigners owning property or land - its easy pickings and very profitable for government tax revenues.