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An Expats Guide To Buying a Real Estate Property Overseas

A real property is not an asset if it doesn’t put money into your pocket, but takes from it, which makes it a liability. Yes, real estate can generate a stable and reliable passive income; it serves as a valuable addition to your nest egg, but if you don’t do it the right way, you’re missing its full potential to generate vast wealth.

Real estate can be a sturdy buffer

All types of investments are vulnerable to economic downturns brought about by catastrophic financial crisis which affects not only the country’s fiscal status but the international market as well. To avoid huge losses, every wise investor creates a buffer system to withstand financial adversities due to economic meltdown, regulatory changes and natural disasters; in addition to personal issues that may affect one’s nest egg.  One way to do this is to diversify your investments and ensure that real estate enjoys the warmth of your nest.

Buying a real estate overseas reduces the vulnerability of investments because it prevents or mitigates the impact and the effects of losing some aspects of your nest egg. For example, you can lose stocks overnight, but a condominium unit of Real Caribe with sophisticated amenities in one of the hottest economic and tourist spots in Dominican Republic, like Sto. Domingo will stay untouched. It is tangible, it stays where it is, and you can count on it when you need cash.

Emergency protection

How do you respond to sudden events in your life that have relative effects on your finances? Do you opt for survival mode, or the damage control approach?  Immediately following sudden monetary disasters when exceptional measures have to be taken to save your assets, business or people in your life, your passive income from real estate or its lease or purchase price can help you meet your monetary needs. It serves as your emergency protection.

Financial reconstruction

Immediately after a financial loss, investors know that there are operations and decisions that must be taken with an end view of restoring a stricken nest egg to its former glory, while going forward and facilitating the necessary adjustment to the changes caused by your losses. You can use your real estate property to facilitate the immediate restoration of your monetary status to normal conditions, either through selling it or optimizing your passive income from your property.

Here are factors to consider when buying a property in developing-world real estate markets...

Internal factors in the housing sectors:  Availability of land, residential construction sector conditions, and mortgage financing availability determine the supply and demand of real estate properties in a certain country; as well as the affordability and availability of houses.

Cities in the Dominican Republic for instance, has a growth rate of 3.0% per annum which means that the population and the demands for houses are likely to double in the next twenty years. Consequently, the Dominican cities are now preparing to expand their urban growth ring and to urbanize an average of 1,400 hectares of its territorial jurisdiction every year. Moreover, mortgage financing in Dominican Republic is stable and has survived the bustles in the regional and international market. While housing in the country are relatively inexpensive, the demands for the finest homes in the economic district of Sto. Domingo could skyrocket the rental and purchase prices of homes in the coming years. It is a situation which is favorable for real estate investors who decide to buy a price of property in this bustling city. At present, there is almost 1 million housing deficit which calls for rapid production of houses to accommodate not only Dominicans but foreigners who come as tourists, investors or expats as well.

Sound Housing policy

Choose a country with housing legislation which is favorable to property owners, in terms of property taxes and exception, rental laws, obligations and contracts and other housing policies that can affect your interests both as an owner and an investor.

While Dominican Republic does not view decent housing as a basic human right, its housing legislations revolve around two objectives: Every Dominican a homeowner and everyone has the access to low-interest mortgage credit. This means, that all housing policies are centered on promoting decent homes for everyone and developing their capacity to buy or rent respectable homes. The modernization of the housing policy in the country also called for investor-friendly policies on property rights, housing financing and infrastructure and other legal and regulatory policies. What’s more, real estate investors in the Dominican Republic can apply for second passport in the country’s investors program!

Economic condition

You don’t invest in a losing market; you put your money in a thriving and promising industry in an equally growing city with vast opportunities for hefty Returns on Investment (ROI) in the coming years. You think of long-term returns, instead of amassing quick wealth and losing them overnight. While you slowly build your real estate portfolio, you can also grab the opportunities to venture into different types of businesses; in case you decide to become an active, instead of a passive homeowner.

For the past 24 years, the GDP of the Dominican Republic has never failed to amaze anyone with its significant growth and stability, which reached a remarkable 8.7% GDP from April to June of 2016. The immense growth in the tourism industry and a sparkling interest in commercial investments in the Dominican cities, particularly in Sto Domingo is also very encouraging for the real estate sector.

Anyone can enjoy the benefits of buying a real estate property overseas as a way of diversifying investments, so you don’t lose everything when markets crash and stocks go down. It is also a good source of passive income, and a guarantee of a sound retirement portfolio, and you don’t even have to be there. There are companies, such as Real Capital Ventures which specializes on creating top-class passive income for its clients by providing them with the opportunities to gain advantageous deals by investing in real estate overseas, such as the Dominican Republic.

Watch the Investor’s presentation here!

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