How to buy overseas property
Posted by Wei Min Tan on June 30, 2021
Buying overseas property is a brave move that many successful investors do. Our foreign clients who buy Manhattan, New York property usually have a successful business, have multiple properties in their home country and now they want to diversify to a top tier international city like New York, London or Paris. As a broker working with foreign buyers of New York property, here are three pointers to serve as guide to anyone wanting to consider buying overseas property, whether the overseas area of interest is New York, Paris or Dubai.
How to Buy Overseas Property, 4 min video presentation
Don’t buy property from an overseas property show held in your home country
You know those international property shows that are typically held at a five-star hotel in your country? The one where property developers from different countries showcase their properties equipped with a model, computer renderings, floorplans and even convenient financing schemes? Well, that is very convenient for the buyer that these property shows are targeting. But, this is not the place to buy overseas property.
Why? Because successful property projects do not have to be marketed abroad. Marketing abroad entails a lot of extra costs to the developer – airfare, accommodation, marketing material, hotel, transportation etc. It’s a big expense. In New York, successful projects are all sold locally. Foreign buyers know how to reach top local brokers and are represented by brokers locally. There is no need for a successful project to go abroad and entail all the logistical expenses and challenges.
Deal example: Investor client’s three bedroom apartment in Tribeca, purchased with intention to rent out. We targeted this larger size to coincide with strong rental demand in this segment post Covid.
Engage a top buyer’s broker in the foreign country
A buyer’s broker is someone who represents the interest of the buyer. While a seller’s broker, the same person who lists a property for sale, is someone who represents the interest of the seller. Too often, buyers approach the listing broker whose profile appears next to the property the buyer is interested in. Or the buyer speaks to an agent at a property show held at one of the five-star hotels. These agents are seller’s agents. Of course they will say all the good things about their product, because their interest is in representing the seller and selling the property for the highest price.
In acting as a buyer’s broker, my role when representing buyer clients, whether local or foreign, is to help them objectively evaluate the pros and cons of each property. I tell buyers the downsides and risks and provide my analysis of appreciation potential and rental return scenarios. There is no need to focus on a certain development because the entire market is my product.
How to find a buyer’s broker? Do an online search and interview a few brokers. Then decide on one.
Deal example: Client’s condo, a value deal, in top Fidi luxury building. We rented out in less than a week. The high end finishes and views are key reasons.
Weimin’s article, How to finance foreign real estate
Have a team in the foreign country
The broker is usually the lead team member but the buyer also needs a lawyer to review the contract, a banker to arrange financing, an accountant to prepare annual tax returns if renting out, and a property manager to handle all the issues that arise. The buyer can search out to these important team members one by one, or have a broker who can coordinate all the members together. Either way, a team is essential because your team will be ensuring your best interest in mind.
I totally understand the default mode is to attend an overseas property show at a top local hotel in your country. The above sounds like a lot of work. But it’s not really. Just allocate 1 hour of research and you’ll be surprised what you can learn online. It would take at least 1 hour to drive to the five-star hotel, park, browse around etc anyway.
What We Do
We focus on global investors buying Manhattan condos for portfolio diversification and long term return-on-investment.
1) Identify the right buy based on objectives
2) Manage the buy process
3) Rent out the property
4) Manage tenants
5) Market the property at the eventual sale
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