A global lifestyle, passive income, better banking & residency options, asset diversification and protection across multiple countries... These are some of the top lifestyle benefits of owning real estate overseas.
If you want to open a bank in another country, most of the time they won't let you do. You want to move your money to another country, they won't let you. But when you own real estate, a lot of times that will open opportunities for getting residency. From there, you get availability to do banking in that countries, which gives you more options for your money.
Here, we'll going to walk through seven lifestyle benefits of owning international real estate.
One of the most obvious benefits is travel. So I think a lot of people love to travel. Once you have a property overseas, you have the perfect reason to up and travel. So you want to find properties in places you love! Then you always have an excuse to go...
Anytime we are on a vacation or a business trip, we make it a point to allocators time to explore, getting a feel for the local market, and looking at some deals. Recently, we did some investments in Colombia. We’d been enjoying spending time in the country, but it’s also a booming market and has some extraordinary opportunities real estate deals. We purchased a property in Bogota, and that is now part of the lifestyle from here on out.
2. Passive Income
With real estate you are earning continuous, passive income. You’re getting capital appreciation as the value of the underlying asset increases over time, but also then collecting monthly rental cash flows along the way.
Given real estate is an inherently productive asset, it’s really the passive nature of that growth that carries some distinct lifestyle benefits. That means that once your property is up and running, you have a stable means of steady income while still getting the freedom and flexibility around your time and location.. You can be traveling the world over, working on other ventures, etc -- all the while still generating short- and long-term value in your properties.
Owning real estate in another country is also one of only a couple ways that can achieve some degree of privacy on your assets. Along with only gold and other precious metals, foreign real estate is a legally non-reportable asset to the IRS.
While you are still definitely responsible for paying taxes on any income or sales proceeds, the asset itself is exempt.
One caveat to note — it has to be held directly within your name, personally. Anything in an LLC, a trust, a partnership, or real estate fund would in fact be reportable.
You're also protected, like if somebody sues you in America, it's very difficult for them to take your property in Colombia.
4. Asset Protection
Another key benefit to real estate is that it offers different types of protection of your assets. In the event of a lawsuit, many if not all of one’s personal assets can be at risk — even retirement funds and IRAs are fair game.
A place like the US is exceptionally litigious, having 5% of the world’s population yet accounts for 90% of lawsuits. Real estate assets held overseas are typically much harder to go after, so insulated from much of that risk. If somebody sues you in America, it's very difficult for them to take your property in Colombia. It can always serve as a nest egg to fall back on in the case anything goes wrong.
In many cases, owning land or property can be a key step to obtaining either a residency visa of full on citizenship. That can be important as it gives you security in having future living options in the case that relocation makes sense for you.
A friend recently mentioned they had bought some property in Bonaire as a means to gain residency as their ultimate vision is to retire there. Portugal is another great example, as they have one of the most popular Golden Visa programs in the world.
6. A Second Home
Another great reason to own real estate abroad is that it’s a property you can have for yourself, a second home. You can rent out your house one or two months out of the year, cover your costs, and then have the house for the rest of the year to yourself.
Some people, they're largely just doing it for cashflow. So they have their Airbnb out there all year around and then maybe 2 weeks out of the year, they'll take it, they'll enjoy a free vacation, then collect money year around.
For example, one of the properties we have in Colombia is a 12-unit Airbnb. When we come and visit Colombia, we have somewhere to stay for free. Rather than another stuffy and overpriced hotel room, we have a comfortable place that I know.
Having a home away from home, is just another great benefit and the lifestyle of owning international real estate.
One of the lesser known benefits that people don't talk a lot about today is banking. Over the years it's been getting more and more difficult to bank. If you want to open a bank and/or move money to another country, it's increasingly not possible.
However, when you own real estate and get access to residency and citizenship, that then opens doors to a country’s banking and financial services industry.
That obviously gives you more options for diversifying where you’re holding assets. It also opens opportunities for high yielding investments where you have many markets like Colombia, Uruguay, Cambodia where you could get CDs or savings accounts that offer 5, 7, 9% returns. Compare that to maybe 0.25% on a “high yield” account in the U.S.
More Than Just Financial Returns
Investing in real estate overseas can make a ton of financial sense, but it also opens up some pretty compelling benefits for those seeking and building a more international, remote lifestyle.
Remote Ventures is an open investment platform for buying and selling fractionalized real estate all around the world. It gives everyday investors a simple way to access the global real estate market and build a truly diversified, cash flow generating portfolio.
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