Real Estate Investing Culture

[Brandon Goldsmith]

I am curious to know what the general attitude and cultures are of real estate investing in other countries. Here in the United States, it is obviously a huge industry and you can almost always count on someone to take your call and do business with you. How does this compare to the rest of the world? Do various parts of real estate differ more from country to country or continent to continent.

Additionally, when looking to invest in foreign assets and invest in real estate in other markets, what some things to always be mindful of in these various transactions?

[Mike Lambert]

@Zach Lemaster

Like you mentioned, the basics of real estate are the same everywhere. Yet, the knowledge and skills required to successfully invest internationally are different.

I think pretty much everyone will agree that the US is a great country to invest in real estate and the 1031 exchange rule is part of that. I don't know of any other country having something similar either but some countries have something even better like no capital gains tax.

What US investors often don't know is that the 1031 Exchange rule applies to their investments in foreign properties as well. Therefore, they can benefit if the countries they invest in have lower capital tax gain rates than the US.

Foreigners investing in the US actually rarely can benefit from the 1031 Exchange rule (if they don't cheat their taxman that is). Indeed, foreigners are taxed by both the US and their home country. Thankfully, if there is a treaty for the avoidance of double taxation covering real estate capital gains taxes between both countries, the foreign investor in the US can credit his US taxes against his domestic taxes. So, if the US charges no taxes by virtue of the 1031 Exchange rule, he's still be liable to pay the full capital gains tax in his home country.