12 Things You Must Do Before Buying Real Estate Overseas

People buy homes overseas for a variety of reasons: Perhaps you want a vacation property you can rent to help pay your bills. Or maybe you plan to relocate permanently.

It is often possible to get excellent deals on stunning properties if you choose the right place to buy. However, making such a purchase is not something that should be done on an impulse

Here is a checklist of tasks and considerations to take into account before buying real estate overseas.

While there are many reasons people buy property abroad, be clear about your own motivation from the outset. Knowing your goal can help you make some important decisions.

For example, if you're buying for yourself, you can decorate the place anyway you like. But if you plan to rent it out, you will need to renovate according to what the market demands.

Naturally, you want the country you choose to be safe and to have a stable government, banking system, and permitting processes. Ensure you will be recognized as the legal owner.

If you plan to rent the home, a local property manager can be a crucial asset. If you are looking to retire in the new country, make sure you can live there legally.

Before you sign any documents, consult with a financial advisor so you'll have a full, informed picture of how this purchase will impact your finances.

Once you get the green light, identify other potential costs you need to account for, such as maintenance and insurance. You will also need a bank you can work with in the new country.

It is absolutely essential — and worth the money — to have competent counsel near your new home. Just as in the U.S., you need lawyers to complete key parts of the home purchase transaction.

Do your due diligence to make sure that the attorney’s first priority is you and not real estate agents or developers.

Every country has different residency rules linked to property purchases. In some places, purchasing a home opens up the path to residency in and of itself.

In other places, there may be restrictions that prevent you from buying. In that case, some domestic agencies may help you find legal workarounds.

Real estate practices in other countries can differ in significant ways. For example, without multiple listing services, it can be difficult to price comparable properties.

Another key difference is that in some countries, real estate agents are solely in it for the commission, which may make finding trustworthy agents somewhat challenging.

If you plan to rent your property either to a long-term tenant or as part of a short-term rental, make sure you understand the rules for doing so. That good lawyer you hired is a great resource for this task.

Fortunately, many countries are fine with you renting out a home as long as you have the right licenses and pay the appropriate taxes.

This may seem obvious, but you should visit the property before you buy it. You want to make sure it looks as it was described in the listing.

You also want to get a feel for the neighborhood so you're not surprised by unexpected weekend noise from boisterous tourists or loud neighbors.

While you're in town, meticulously check the property and look for any hidden pitfalls. Consider hiring a local expert who knows what to look for and can walk through the property with you.

If you are buying a unit in a building, explore common areas, elevators, and pools so you have a full picture.

If you're purchasing in a development that has a homeowners association (HOA), dive into its documents to make sure the HOA is running an efficient and ethical operation.

Have your real estate agent verify that the HOA’s finances are in order. Compare the HOA’s fees to those charged by other HOAs in the area.

Understanding a region’s culture goes beyond being a good neighbor.

For example, purchasing a home in the Middle East means the rules of the Islamic financial system likely apply. You will need to know and understand these rules.

In some countries, it’s important to look for a home that’s within walking distance of grocery stores, public transportation, post offices, and more. Cars may not be as common in these places as they are in the U.S.

If you are renting out your property and cars aren’t common, you may have difficulty finding good tenants or tourists if amenities are not nearby.

Whether you're aiming to tap into a new source of income with an investment property or searching for your retirement dream home, being an informed purchaser will ensure you make the right move.

Take the time to make sure you are buying wisely. If you play your cards right, you may be able to sell the property a few years down the line when it appreciates in value.