The majority of American expats say that they have a better work-life balance since moving overseas. It’s, therefore, no surprise that foreign buyers are snapping up properties across the globe. Italy, the UK, Turkey, and Australia are all popular locations for property investors right now. But property prices in many foreign countries are rising, so if you want to buy, you’ll have to budget carefully.
Release equity
American homeowners have more than $9 trillion dollars in equity, according to Business Insider. If you've got a large sum of money tied up in your current property, it makes sense to release it so you can get your hands on a property abroad. The average amount of tappable home equity homeowners in the U.S have is $153,000. While this isn't always enough to buy a home in the most popular foreign markets, it will help you out a lot. For example, the median cost of a property in Australia is just shy of $1 million, so having a good deposit to put towards it will really help you out.
Make cutbacks
The average American spends $164.55 every day. Items such as food, leisure activities, and gas eat up many people's incomes. By making cutbacks on non-essential items, you'll be able to get your house abroad sooner rather than later. Lunches out, takeaways, and online shopping sprees could be costing you as much as $350 per week. Drop all these and you'll be able to pay off your existing mortgage quicker. When your mortgage is paid off, you'll be in a better position to buy a property overseas because your monthly outgoings will have reduced.
Take out a mortgage
You have two options here; a mortgage with a local lender or an overseas mortgage. There are very few home-based lenders that will give you a mortgage for a property in another country, but it is possible. Your best bet is to find a local bank that has branches in your chosen country too. If you opt for an overseas mortgage you may benefit from a lower interest rate. However, you'll also have to pay in their currency. This can be a problem when the exchange rate fluctuates in an unfavorable direction.
Sell up
55% of Americans say they'd like to own a second home. Second homes make great vacation or rental properties. But when you're planning on buying in a different country, it often makes more sense to sell your current home so you can fund your new one. The average price of a home in the U.S is currently more than $404,000. This is more than enough to buy in England where the median property price is £271,000 ($364,308), or Rieti, a city close to Rome, where houses typically go for 96,000 euros (108,628).
There are plenty of reasons to invest in property abroad. It’s great if you have the cash readily available to buy straight away, but if you haven’t, these tips will help you get your hands on a home overseas.
