Real Estate Investing and Vacation Home Buying is evolving with technology. Especially if you plan on investing abroad or plan on purchasing a second vacation home in a hot spot.
And guess what?
You no longer do you need to travel to South America, the Caribbean, Miami, Vegas, Arizona or Europe to scout for your next vacation home or international investment property.
Whether you’ve been thinking about buying an oceanfront villa, retirement home or a stylish urban condo – you can find out about many of these real estate deals online.
Online Tours & Auctions
There are free online “tours” that give you inside access to an assortment of international vacation homes, retirement villas, ski chalets and luxury rentals in places like Saint Kitts, Belize, Miami, Portugal, Canada and even Australia.
Not only do you discover different global properties you may not find anywhere else, online property tours & auctions also provide great information about the area and some of the local customs.
Online property auctions and online property tours are the latest trends in buying overseas, luxury and retirement property investments.
Benefits of Online Tours & Auctions
Here are 5 benefits of attending an online event:
- Log in from anywhere and attend at your convenience
- Meet online with real estate experts from around the world
- Save on travel expenses
- No vacation time required
- No high pressure salesmen or timeshare presentations
The Economist’s Fine Properties Fair gives you an inside look at an online tour with global vacation second-homes in locations like the Caribbean, Florida, Central America, Europe, Australia and Canada.
How to Conduct Due Diligence
Ronan McMahon, our contributing international and vacation home expert, advises that when you are ready to buy your international vacation second home or luxury investment property that you perform a simple self test and conduct due diligence on all purchases prior to signing on the dotted line.
Are you Ready to Buy Self Test
He says, “Although there are hundreds of factors that will eventually go into your final decision figuring out the basics below will help you get started”:
- Your reasons for making the investment
- Your tolerance for risk, and how much you have to invest
- How you intend to finance the property
- The needs of your existing portfolio
- Your level of experience in the market
- The level of involvement you want to have managing the property
How to “Due Diligence” Your Overseas Property
Many people take risks when buying a property overseas or luxury vacation home in the states that they would never take when buying something local.
It's easy to get caught up in the excitement, and it's very easy to get carried away. You need to remember that some things stay the same—don't leave your common sense at home. This is what he recommends:
7 Steps to Conducting Due Diligence
Step #1: Hire a good, local, in-country attorney. Your bilingual local attorney should work for you—and only for you. He should not represent anyone else in the transaction. That may sound like a given…but in many countries, an attorney can legally represent both sides in a transaction. You should be aware too that while the US and Canada use common law, in most of the rest of the world civil law applies. Civil law is very black and white. There's no pleading for fairness…you are either right or wrong.
Have your contract translated and read it carefully yourself. Ask your attorney to explain anything you don't understand. Your attorney may not explain a clause that is normal procedure in his country—but it may be very different to how you'd do things back home.
Step #2: Buy title insurance. Title insurance is available in most countries through companies like First American Title Insurance, and it's affordable. It gives you peace of mind. Also trusted escrow services if you make any payments that are contingent on the vendor fulfilling certain criteria.
Step #3: Check the sale contract. Have your attorney translate the sale contract for you, and read it yourself. Ask your attorney to explain any clauses or terms that you are not sure of. Remember, it doesn't matter what the vendor has told you. What matters is what's in the contract. Check that the property details, description and price are correct. Check that the seller's name matches the name on the current title deed.
Step #4: Check the title deed. Your attorney will check the title chain in the registry. Check if your title is registered or possessory. In some countries, they can seem similar. You can live in a Rights of Possession property, record your claim to it, and you can sell it. There is a difference, however. Registered title means you own the land. Possession means you have the right to occupy the property, until someone with a better claim to it turns up. You cannot get mortgage financing on a possessory property, either.
Step #5: Check infrastructure essentials. In particular, make sure you understand how water and electricity will get to your property and how waste will leave.
Step #6: Check the CCRs/HOAs. With the CCR’s (Covenants, Conditions and Restrictions), make sure there is nothing you can't live with. Keeping certain pets may go against CCR rules. See what standard of maintenance you are obliged to carry out on the exterior of your property—and what remodeling is allowed.
Step #7: Investigate tax issues and wills. Discuss with your attorney the best way to hold your property overseas. Whether you hold the property in the name of an individual or a corporation, for example, this is dictated by your personal circumstances and what your plans are for the property…do you want to hold it long-term, sell it before completion, or use it for rental income? Ask what happens if you die. You may need to have two wills, one in the country you are buying in, and one back home.