You may be unhappy with your current portfolio, and it may abe time to explore new options. Looking into offshore options is a great way to open up your investment portfolio to great markets, secure banking, and tax advantages. One of the most popular ways to diversify a portfolio with an international investment is with real estate. Many real estate investments can lead to residency and, in some cases, a quicker road to citizenship. There are also a lot of tax benefits that come with investing in real estate offshore. It is one of the few ways Americans can legally keep some of their money offshore privately. Many investors think they can simply mortgage a property in a new country the same way they would in the US, but unfortunately, it’s not as easy as that. Some foreign lenders won’t allow non-citizens to borrow from them. Also, the fees and interest that come along with borrowing in a new country can be high. Overall, borrowing for a foreign purchase can be tricky to navigate. Professional guidance is always recommended when considering a move abroad. In this article, we will look at what makes European investment attractive and some of the options US investors have to finance their property.
Europe is a very popular place for foreign investors, especially retirees, young families, and those conducting international business. Other reasons investors choose European real estate are for asset class diversification, high-income return, geographic diversification, and to hedge against inflation. Having a vacation home or an income-earning property offshore can offer investors a variety of advantages, such as residence in the country, which can come with further financial benefits through favorable takes and investment opportunities. Portugal is a leading example of this advantage. The Portuguese Golden Visa grants investors permanent residence in exchange for investing in personal or commercial property of a particular value. Some investors are looking for a solid return, while others are hoping to make the new investment their home. Whatever path you want to take, several European countries can make that dream a reality.
It can sometimes be challenging to finance a home in a foreign country. You can sometimes find mortgages with very low rates in Europe. This makes it very easy to purchase income-earning real estate much cheaper than it would be in the US and pay back the mortgage in no time. However, this is not always the case. Here, we will explore some of the options for financing a property in Europe as a US investor:
Some US banks offer international banking services and have the capability to arrange for a mortgage in Europe. To find this, you will have to work with your bank or another domestic bank of your choice to see if they offer this and in what jurisdictions they can offer service. When you finance from a domestic bank, you get to do all of the work in your own language, which makes it less likely to run into any translation issues and cut down on fees. This will also make the process quicker, as a local bank will have access to your credit history.
Some choose to mortgage their property with an offshore bank. A bank that is located in the area where you want to make the investment will have much more knowledge of the real estate market and laws. This means it will be easier to access deals and lower interest rates. There are a few things to consider when choosing this option. It may be challenging to find a bank that will offer a foreign investor a mortgage, and the interest rates could be high if they do. Also, you will likely have to exchange currencies. Therefore, it could be beneficial to create a relationship with an offshore bank before borrowing money. There are many advantages to offshore banking beyond mortgages! Also, with the professional guidance of Alpen Partners, you can easily form relationships with banks around the world.
Using savings to purchase a home can reduce roadblocks involved with the difficulties of borrowing money offshore. This will also eliminate the worry of high interest and could give you some bargaining power over other buyers. Before doing this, however, it’s essential to consider the additional costs associated with this, including tax and legal fees, translator fees, moving costs, and maintenance. Experts only recommend paying cash for a property that is built rather than in the pre-construction phase. When paying cash for a property that is not yet built, some risks could stop the property from being built entirely. It could be hard to get your cash back in these circumstances.
With it being so easy and inexpensive to purchase real estate, earning residency abroad is simpler than ever. For more information on financing a property in Europe or other financial goals, reach out to the experts at Alpen Partners. There’s much more to moving abroad. Each country has its own rules and regulations when it comes to moving in. Some options include residency and citizenship, which can be both temporary and permanent. Expatriation may involve acquiring a new passport and renouncing citizenship. Acquiring a new passport or citizenship allows for various investment opportunities, as well as opportunities for travel. Connect with an expert today.
No matter the problem, Alpen Partners will handcraft a solution for you. We know that there is no one-size-fits-all when it comes to financial success. Our approach involves working with our clients to make a unique plan to meet their needs. Rest assured that we will work hard to guide you through the process of meeting your financial and personal goals.
Contact us to enhance your financial plan today.