Published by Forbes.com | November 27, 2024
If you’re thinking of investing in real estate in different countries, you’ll find there are complexities to navigate as you cross borders.
In addition to potential language differences, you may need to manage risks like currency fluctuations and changing markets. If you’re prepared, you’ll be well positioned to find opportunities and make informed decisions.
Follow these guidelines as you consider the intricacies of investing globally in real estate:
Research the Market Dynamics
When I interviewed Tal Peri, head of U.S. East Coast and Latin America at Union Investment, on my podcast, “The Insider’s Edge to Real Estate Investing,” he emphasized the importance of focusing on key indicators in different markets. Tal has more than 20 years of industry experience across markets and product types, and has closed more than $5.5 billion in real estate transactions. Union Investment is the largest open-ended real estate fund in Germany with a global real estate assets under management of $60 billion.
Consider past data about a region, as well as current events. You can look at factors such as rent growth, population trends, and job creation. These metrics can be helpful when determining the long-term outlook of a real estate investment.
Tap Into Local Expertise
When navigating a foreign market, you’ll want to understand the nuances in a particular region or city. Reaching out to brokers in the area, as well as property managers and market analysts, can allow you to access on-the-ground insights. Tal discussed building relationships with local experts and how that has enabled him to identify opportunities and understand a region’s requirements.
Be Aware of Cultural Differences
Every market has its unique cultural and business customs. Tal, who has managed investments across diverse regions, stressed the importance of cultural adaptability. Understanding how business is conducted in each country can assist you during the negotiating process. You’ll be able to adapt your style and business practices to align with local norms.
Navigate Tax and Regulatory Complexities
Global real estate investments often involve intricate tax and regulatory frameworks. You’ll want to make sure you understand local tax laws, or work with a professional who can help you navigate them. To avoid surprises, you can consult with legal and tax professionals familiar with the specific regulations in your target market. Structuring your investments correctly can also help you optimize tax efficiency and compliance.
