Although getting started might be difficult and time consuming, investing in the real estate industry in an offshore jurisdiction can be worth it. The decision of buying a property in a foreign country is not to be taken lightly. It has to be accompanied by a well outlined plan and thorough research of the trends and the market of said country.
Investing in the real estate industry starts with property evaluation, research and have a property management strategy. An offshore real estate investment can be a full time job, since the market trends are constantly changing.
An appraisal of the property will get a lot of questions answered. Before purchasing it and every year since the purchase. The appraisal is done to find out how much your property would worth if put on the market for sale again. Of course if the result of the appraisal is higher than the purchase price, you have gained capital returns.
An important tool of an offshore real estate investment is property management service. A company or individual that helps you market the property, also meet the tenants, take and assist their complaints and undertake maintenance of your property, comes handy when you are not available to dedicate 100% to the investment. It is important to keep the investment showing returns to do maintenance and renovations as it ages, remember you have to spend money in order to earn it.
Some characteristics of real estate investing are:
- Durability: a building can last for decades, if not longer.
- Heterogeneous: in terms of location, style, building and financing every piece of real estate is unique.
- An investment and consumption good: it can be purchased with the expectation of receiving a return, by leasing it, or for using it, by living in it. This characteristic can be combined, specially if not living 365 days of the year in the country where it was purchased.
- Immobility: the consumers come to the good, instead the good going to them. The spatial fixity means that market adjustment must occur by people moving to dwelling units.
- Fluctuation: as well as the price of the property can go up, it can also go down with depreciation, (reason why it is important to do constant maintenance and renovations).