Recessions can often offer opportunity and currently a number of countries have both residential and commercial properties that clients can purchase to rent and utilise the possible investment returns.
However, if purchasing by cash is not an option, then raising finance secured against the property could be an ideal option and dependent on your own personal financial circumstances could also be tax efficient (and subject to local tax laws). Please check with a Solicitor and/or Tax Advisor who is knowledgeable about that country’s tax laws.
Loan to value, interest rates and other lending criteria do vary dependent on your own personal financial status, type and value of the property, location, loan size and whether you are borrowing/purchasing in your own name or in a local or offshore company name.
Please note, some lenders may take into account a proportion of the rental income to be received from the property, but will not lend just based on the rental income only.
You also need to check if that country (or region/district of that country) allows rentals to take place, whether a Licence is required and if there are additional/different taxes due on the rental income to be received. There may also be additional taxes due if an investment property is eventually sold – again, check with a local independent lawyer before committing to the purchase.
We frequently use the services of carefully selected third parties for the provision of Buy-to-Let mortgages, as this can be a specialist type of borrowing in a particular country.
Further details available on request.