Several years ago I lived andworked in France and experienced a bit of a mishap involving my French bankaccount. I filled out a deposit slip and dropped a paycheck into this account,only to find after several weeks, that the money had still not showed up, and,had, in fact, disappeared. After a few tears, looking up French bankingvocabulary, and sorting things out with a banker, I discovered that the missingmoney was due to a single number on my deposit slip–the French cross theirsevens, and, in my Americanness, I had failed to do so, resulting in the bank’sinability to correctly read my account number. To this day, I still cross mysevens.
Experiences like this are commonwhen living and handling business abroad. Dare I say, they are even part ofwhat makes traveling and living abroad so rich. Perhaps you’re ready forexactly this kind of rich adventure–to sell everything and move to a new country.If you have ever wondered what it would be like to invest in real estateabroad, as a home or a rental property or both, here’s a quick guide on how toget started.
The SeaReal Team’s Rodolfo HernandezMcIntyre says that “deciding if and where to invest and live overseas is atwo-pronged process.” He recommends that you first travel to and fall in lovewith a particular place–its location, food, people, culture, and lifestyle.Darn, this means you have totravel to Italy or Mexico or wherever you would like to live and eat pasta andseafood and chat with the locals over a glass of wine.
Next, there’s the practical side ofexploring a new country–the, shall I say, nitty gritty, crossing-one’s-sevensside to living in this country. What does the area offer as infrastructure forthe expat community: homes and amenities, transportation systems, healthcareand hospitals, lifestyle and living expenses? What are the home prices? Is themarket at a high or a low? To research these questions, Rodolfo suggests thatyou spend some time reading online and talking with locals.
2. Finance through your own country
Due to exchange rates anddifferences in banking systems, financing real estate purchases abroad can betricky. US Newsmentions several financing obstacles you might run up against:
Loan-to-value ratios may be lowerthan you are used to, and are typically 50 to 75 percent of the value
a 30-year loan is unheard of interest rates are usuallyadjustable, rather than fixed.
According to Rodolfo, the buyershould find financing in their home country through a personal line of credit,a home equity line of credit, a reverse mortgage, or other options. Thisfinancing will then translate into an “all cash” purchase in the newcountry.
3. Expect to learn
This is true for any kind of travelexperience. You will make mistakes, and these mistakes will allow you to learnnew things and even occasionally stumble in to an amazing experience–finding a tuckedaway gem of a restaurant after getting lost for a few hours, perhaps. In mycase, losing money over not crossing my sevens allowed me to learn–well, I’mactually not sure, but it does make for a slightly funny story now.
Rodolfo advises American buyers tokeep in mind that the investment process “takes significantly longer than inthe US.” In Mexico and Latin America, the process is similar to the systemEurope has used for the last 500 years: rather than real estate agents,attorneys (a.k.a. notario publicos) write and execute contracts. Rodolfo adds,“To best prepare for the unknown and to avoid pitfalls, ask expats who live inthe area of your choice for recommendations on real estate agents, notariopublicos, etc.” Here’s a great blogfrom expats living in Mexico.
For moreinformation about how to invest in real estate, either abroad or at home, getin touch with Rodolfo and the rest of The SeaReal Team at 206-518-5518 or email@example.com.