Investors sometimes ask if it makes sense to buy a rental property in another country when they live so far away. Often, they’re curious about exploring other areas because there are few good deals left where they live, or they’ve heard that certain locations have excellent returns.

Regardless if you live in Singapore, Hong Kong, Shanghai or Seoul, it's important that investors are prudent and take certain precautions when purchasing global assets.

Why be a Long-Distance Landlord?

1. A change in lifestyle

You get a chance to live in a different country and experience a different culture as opposed to just passing through whilst traveling. Why not seek the best of several worlds if you can? For you it may be the glorious weather and island of Phuket, for others, the fascinating urban living of Bangkok, business opportunities in Vietnam or cheaper education for their kids… We know of many international investors who live one season in one country and another elsewhere.

2. Retirement

For different reasons, more and more people imagine their retirement in a different country than the one they were born in. A common incentive is to go somewhere you can achieve more value for your money and stretch your money further than you can at home. Thailand is regularly cited as one of the top destinations in the world to retire in due to quality living conditions and cost.

3. Tax incentives & low property taxes

Changing residency may lower your taxes and have a noticeable impact on your finances.

4. Investment & Passive Income

A property is a tangible asset, something you physically own, which when well managed will create passive income in your sleep with a potential capital gain upside. 

Handling the Disadvantages of Long-Distance Real Estate Investing

Make no mistake: owning rental property far from home can be a complex undertaking. There are several challenges long-distance landlords often encounter:

1. Lack of knowledge about the area in which they’re investing

2. Lack of familiarity with good local service providers

3. Relying on others to take care of day-to-day problems or repairs

4. Difficulties in getting the rent paid on time.

But these obstacles don’t have to prevent you from purchasing long-distance rental property. Global Mortgage Group has Asia based associates and Coldwell Banker Sae Property in Phuket can assist with sourcing the right property.

Here are some ways to make your global real estate investment a success;

1. Do your homework and learn about the area. Begin by speaking to an agent. Interview agent's by phone, and ask those you like best to send you listings of homes for sale that meet your criteria. Browse properties online to get a feel for the return that you can expect on homes in your price range.

Because there are more expenses involved in buying and managing long-distance real estate—such as the travel expenses you’ll incur to visit the property—don’t rule out foreclosures, short sales, and other distressed properties that can be purchased at a substantial discount to comparable homes in the area. This type of home probably won’t be move-in ready, but after you make the necessary improvements, it should yield some start-up or “sweat” equity. 

2. Find a reliable and affordable property management agent. It’s not very difficult to make the necessary calls as problems arise, but if you find that landlord duties such as managing repairs and collecting rents is becoming too stressful, ask your agent. 

Once you’ve rehabbed the property and your tenants are in place, your rental should run on autopilot for quite awhile. If your tenant calls with an occasional repair problem, you can simply pick up the phone and put them in contact with your property manager.

In sum, there are many advantages to buying long-distance real estate, and while there are some disadvantages, they can be easily handled if you’ve done your initial research and set up a network of reliable resources.

If you are a non-citizen or an expat and thinking about buying international real estate with a mortgage loan, Global Mortgage Group can help. Phone or email Robert Chadwick Partner and Co-Founder of Global Mortgage Group via the contact details below.

To discuss the property market and learn more about properties for sale in Phuket phone or email Norbert Witthinrich from Coldwell Banker Sea Property via the details below.

Sources: Global Mortgage Group, Coldwell Banker Sea Property

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