Buying a property outside of your native country can be an exciting new venture, no matter the motivations behind your decision. But even if you’re well versed in the nuances of home ownership in your homeland, buying real estate in a foreign country can come with additional challenges. So, to ensure you’re not caught off guard by any unexpected hurdles, we’ve assembled this article with three essential things to know before buying a property abroad.

1. Understand your financing options

Up first, one of the biggest sources of anxiety for new homeowners can be the price tag, downpayment, mortgage, or, in short, anything involving the money side of things. How are you going to pay for your new home?

In the United States, it’s common for homeowners to secure a mortgage from a bank or another financial institution and set up a long-term payment plan to help facilitate the purchase of their new home. The nuances of doing this in your home country are probably already worthy of book-length explorations. But understanding that things might work differently in another country or that foreign buyers may have to play by different rules than citizens is super important.

For instance, if a U.S. citizen decides to buy a property in Turkey and plans to finance it through an American bank — they should think again. While options for making this happen exist through other methods, it will likely be impossible to do via American banks as they will generally not provide mortgages for foreign properties. 

On the other hand, if a U.S. citizen tries to get a loan from a Turkish bank to pay for their local property, as a foreigner, they may find themselves subject to higher interest rates, the need for a larger down payment (and this sum can be quite significant compared to the one you would pay in your home country), and residence status requirements.

Of course, if a Turkish citizen decides to do the same in the United States, they’ll likely face many of the same requirements and challenges. 

Bottom line In the end, it will pay off to do your due diligence in this area and research the particulars of securing a mortgage in a foreign country or any requirements or alternatives for financing your purchase.

2. Understand local real estate laws and the peculiarities of home ownership

Different countries have different laws and regulations regarding foreign real estate ownership. 

For instance, in the United States, foreigners are generally allowed to own properly. Meanwhile, the same is true in the European Union in France and Spain. While the cases above are quite straightforward, this can vary by country: in Italy, the purchase of real estate can differ depending on the nationality of the purchaser; in other words, your home country must be a party to an international treaty between itself and Italy.

And there are still thornier situations: in Thailand, direct foreign ownership of real estate is not so straightforward: the law prevents foreigners from owning landed property — and this means limitations on landed houses or villas. This requires purchases to leverage alternative ownership options; it’s still possible; you just need to be aware of some different limitations and laws.

Bottom line Be aware of this reality, and beyond doing your research on the situation, it may be advisable to work with a local, reputable lawyer who operates within the jurisdiction where you plan to make your purchase — this could be a worthwhile consideration for ensuring your purchase proceeds smoothly as well as protecting any potential real estate investment well into the future.

3. Location and finding a property 

It’s quite one thing to look at photos of a property online compared to seeing something in person, right? Likewise, there are a lot of details related to location that deserve your attention. Let’s start big and then go small.

First, consider the country itself: it’s worth considering any issues related to political stability in your future home. The United States, for example, is bordered on both sides by countries with which it maintains friendly political and economic relations, and the dollar remains a global benchmark currency. But this isn’t true for much of the world. It’s not a bad idea to take at least some time to learn about the history, culture, and current political and economic situation in the country where you want to purchase.

Next, consider factors related to the general region within the country where you are looking to buy — are there any safety concerns worth noting there, natural or otherwise?

Then, moving on, take some time to consider the city where you may soon find a new home: what is the cost of living situation? How is access to education? What is the cultural scene? What about crime rates? Repeat this same step for the particular neighborhood where your home is located.

Finally, be sure to do the proper work understanding the home itself: when was the property constructed, and by whom? Was it built by a reputable party?

Bottom line There’s a reason that ‘location, location, location’ has become a commonly understood mantra, and it’s important to understand the situation where you or your investment will be located. 

A good shortcut to solving many of these problems (in addition to following the advice above to engage with a good attorney) is to seek out the help of a credible real estate agent or agency. They’ll be able to answer your questions more quickly or point you in the right direction to solve many of the issues above. Additionally, they’ll also be able to help you navigate the difficult challenge of locating potential properties for purchase in the first place.