You have an opportunity to purchase some offshore real estate. This is an opportunity that deserves careful consideration. There are plenty of reasons to acquire one or more types of international real estate, whether it’s residential or commercial properties.
Consider these advantages and how they relate to you. Even if only a few apply, that’s reason enough to look into the deal further.
1. Making the Most of Currency Exchange Rates
What sort of property could you purchase in an offshore setting? Depending on the current exchange rate, it may be possible to get more than you thought possible. Assuming you’re looking at real estate in a nation with a stable economy and a reasonable cost of living, the residential or commercial property under consideration could cost less than you expected.
Think of what that means in terms of having funds left over to make property improvements. When it’s all said and done, a residential property in the right offshore setting has the potential to become one of your most valuable assets without breaking the bank. Factor in the excellent interest rates that an authorized offshore bank can include with the mortgage, and the deal is even better.
2. Taking Advantage of Tax Breaks
Did you know that some nations offer tax incentives to offshore buyers interested in acquiring real estate? Those incentives will vary from country to country, but you could enjoy things like little to no property taxes for the first several years of ownership. There may also be special tax brackets that apply to offshore owners that will kick in once that grace period is over.
The tax benefits may extend beyond the nation where your offshore property is located. It could be that you have access to tax deductions for offshore holdings through the revenue agency in your home country. An accountant can take a close look at what you’re buying, where it’s located, and tell you if the purchase would qualify for any domestic tax break.
3. A Vacation Home to Call Your Own
Choosing to buy real estate in an offshore location that you love also means never having to factor in hotel expenses when you want to take a vacation. It’s easy enough to ensure that your offshore residence is prepared for your arrival. All it takes is a local agent who can look after the property, make sure it’s not reserved for renters during the time you want to enjoy your vacation, and who will even make sure it’s cleaned before you arrive.
Consider how nice it would be to arrive at the airport, then take ground transportation straight to your door. There’s no waiting to check or any worries about a room not having the amenities that you were promised. Instead, what you get is a familiar space, convenient to the things you like to do, and feels like the perfect home away from home.
4. More Returns on Your International Properties
Maybe you want to rent out the property in between vacations. Engaging the services of a local agent makes it possible to have the property available for bookings by others who are taking vacations. It’s easy enough to establish a rate that’s competitive and still allows you to cover the expenses and net a little more money as well.
This is something that you may already do with properties at home. Here’s a fact that might provide more incentive to proceed with the international purchase. Property owners with offshore homes can often net as much as 10% annually on short-term rentals. That’s better than you manage on some domestic properties once you cover all the expenses. Some of your net profits can go to pay off the mortgage on your offshore property sooner rather than later.
5. Diversifying Your Investment Portfolio
You already know that having offshore investments is a great way to grow a portfolio and add more diversity to the mix. It’s also an excellent way to ensure that some of your assets are likely to continue performing well, even if the domestic ones are currently in a slump. Even as you look into offshore stocks and other holdings, consider adding an international property or two.
Depending on where those properties are based, they could turn out to be tremendous assets for growing the portfolio. There are countries where real estate values increase consistently. Something you buy now could have a much higher market value in as little as five years. Even as you have money flowing into your international checking account from temporary rentals, the asset itself is becoming more valuable. Should you need to sell it in a decade or so, you may end up with a significant financial gain.
6. A Home Waiting for Your Retirement Years
It’s great to have international real estate to hold for investment purposes and rent out in the interim. You also like the idea of having your own place to stay while on vacation. There’s one more reason to think about investing in international property now: you want to have a home waiting for you once you retire.
The cost of living in the country where you own property is more favorable than your current country of residence. The pension, IRA balances, and other retirement income you have coming your way will provide a much more comfortable standard of living in that offshore location. The fact that you already own a home outright will make those retirement years even more comfortable.
7. The Protection That Comes with International Assets
An essential benefit of having international resources is that they remain out of reach if legal issues are at home. If you were sued, you already know that a court could order all or most of your domestic assets sold to settle a judgment. What you may not realize is that any international asset remains out of the court’s reach.
In other words, a suit that is not ruled in your favor could wipe out every asset that you have at home. Even your domestic residence could end up being sold. No matter what happens on the home front, the internationally-located house and real estate, along with the balances in your offshore checking, savings, and time deposit accounts, remain within your control. That’s a great way to have a foundation for getting back on your feet.
Now is the ideal time to consider owning property in the international setting of your choice. Consider how you would make use of that property now and in the years to come.
Don’t forget to identify the tax and other financial benefits that you get to enjoy along the way. With the right property in your portfolio, it will be all the easier to build wealth and ensure that your future is more secure.