How You Can Successfully Navigate Overseas Real Estate Investing

Although overseas or International real estate investing has a lot of challenges but it can also be rewarding and impressive especially if an investor have a clearer picture of what overseas real estate investing is all about and also know exactly how to go about it. International real estate investing involves investing overseas in a country where you don't live to enable you manage the day to day activities on your properties. This may sound very discouraging but overseas real estate investing can actually be rewarding if you do the needful prior to investing in real estate overseas. 

As an investor you must equip yourself with the information on the risk involve in doing business overseas especially how rent is controlled and regulated in the country you wish to invest in. Overseas real estate investors must first of all find out if the country they want to invest in is a pro-tenant, pro-property owner or neutral. 

A pro-tenant country has a tenancy law or system with rent strongly regulated in favour of the tenant because rent are strictly controlled by law set far below reasonable returns on investment. This gives tenants so much freedom and they enjoy rights to no security deposit prior to moving into a new apartment, in other words if there are damages to the apartment caused by the tenant on moving out, it is the responsibility of the owner to fix and rehabb the apartment because the tenancy law forbids security deposit that can be used as reimbursement for any unpaid rent or reasonable cost of repairs beyond normal wear and tear.

Moreover, a pro-tenant country allows subletting, assigning and even tranfer of the property to family members or any person who can prove emotional, financial commitment and interdependence with the tenant without the consent of the property owner. Tenants have the right to prolong their contract and can also exchange the tenure for another dwelling. If your investing strategy is to purchase investment properties and hold for rentals in a pro-tenant country you may need to have a rethink and reconsider your alternative options. 

However, a pro-owner country has a tenancy law or system that is strongly regulated in favour of the property owners because rent are set freely by agreement between the property owner and the tenant. 

Property owners are encouraged and allowed to collect security deposit from tenants which may be used as reimbursement for any unpaid rent or reasonable cost of repairs beyond normal wear and tear, if the tenant cause severe damage to the apartment on moving out. The tenancy contract agreement in pro-owner countries is for a specific period unlike what is obtainable in pro-tenant countries. 

Real estate investors who wish to invest overseas must research if the legal system and the alternative dispute resolution of the country they wish to invest in works effectively and efficiently. It is important to understand the rights and obligation of property owner and tenant, find out what the country's law says about lease, lease renewal, termination of contract, eviction, assigning and subletting process and procedure. Most importantly ask questions on rent, duration of contract and security deposit to find out if property owners are allowed to collect security deposit and the limit to how much can be collected from a tenant. 

Finally if rent is controlled and regulated in the country you wish to invest in, find out what the provisions are and the criteria used in determing rent. If you carefully and tactfully avoid these pit-falls and frustrating situations coupled with excellent and accurate estimate analysis, good investing and exit strategy, knowledge of the real estate market of the country, exchange rate, mortgage system and interest rate. All of these put together can help you in making informed investment decisions that can guarantee a successful overseas real estate investing. 

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Olatunbosun Idowu