Fantasizing about living overseas while browsing houses for sale in other countries online is a favourite pastime for many. Reasons vary, from escaping Canada’s high property prices, to retiring to sunnier climes, to owning a second home in a vacation destination.
While it’s true that this can be both a lucrative and gratifying real estate investment, it’s a major decision and thus must be a well-informed one.
Don’t Just Follow Your Heart
It’s easy to be tempted into only looking at oceanfront residences offering spectacular views. Nonetheless, as you would do when purchasing real estate in Canada, it’s important to keep certain primary considerations in mind. Is the property well constructed, in quality materials? Do you truly wish to live in this location, region, country? Investigate neighbourhood. Is it safe? How far away are the local shops?
Research Various Countries’ Pros and Cons in a Home Abroad
The fact that we share a border with the United States, as well as our similar living standards, make it a destination of choice for many Canadians interested in acquiring property abroad. Warm states like Florida, California, Texas, and Arizona are particularly popular with Canadians looking to escape the cold. Even so, mortgages held by foreigners are subject to foreign national fees, driving up mortgage costs for Canadians.
You can also select the country in which you buy real estate according to the advantages it offers. For example, investing USD 200,000 or more in Dominica automatically gives you a Dominican passport. In Portugal, Canadians who own a home worth more than 500,000 Euros receive a residence permit, which entitles them to work there without a special visa. Finally, be aware that in Mexico, foreign real estate investment is restricted to certain zones.
Know the Related Costs
Just like in Canada, properly calculating expenses (different taxes, insurance, maintenance costs, property transfer fees, etc.) is essential to avoid post-purchase surprises. It can all add up quickly so plan accordingly. It’s equally important that you understand the tax implications of owning real estate internationally, including any income generated by renting these properties, as applicable. You should also take the time to assess the cost of living abroad. Some things may cost less than in Canada, while others may cost considerably more.
Explore Mortgage Options
Obtaining a mortgage loan from a financial institution with branches in Canada is the most straightforward solution. Many Canadian banks offer this service, especially for a real estate acquisition in the United States. Because they have access to your credit record, they can waive certain foreign national fees.
Rent to Cover Expenses
Many property owners decide to rent their little corner of paradise to friends, family or even strangers, when they’re not occupying it. It’s a good idea if you want to lower your expenses; however, you must check the country’s laws to see if renting is actually allowed. It’s often prohibited in condominium buildings.
Ask an Expert
It’s best to surround yourself with a team of experts specializing in international property purchases—lawyers, bankers, and real estate brokers—to ensure a successful transaction.
You can make your dream of owning a home overseas a reality. If you get the opportunity to do so, keep a level head and make this decision rationally so that your wonderful project doesn’t fall through.