8 Reasons to Buy Overseas Real Estate Right Now

8 Reasons to Buy Overseas Real Estate

Luigi Wewege

President, Caye International Bank

  • There was an upturn of 3.2% in the GDP figures in the third quarter of 2022, but the change is unremarkable.
  • Despite indications of growth in some economic activities, most economists suggest the economy will continue to slow for at least the next few months.
  • Financial markets and other investments in the US, including property markets, remain unpredictable, creating a demand for more tangible assets and the diversification provided by overseas real estate.

The Bureau of Economic Analysis readings for the third quarter showed a +3.2% change in the US GDP in the third quarter, compared to -0.6% in the second quarter. Despite growth in some economic activities like industrial production, retail sales, and job growth, many economists still fear the possibility of a lurking recession.
Investors tend to turn to hard assets at times like these, and since the US property market faces a price slump, they look for overseas property opportunities.
“There are many reasons why investors turn to overseas real estate,” says Luigi Wewege from Caye International Bank, “but one of the major reasons is seeking a haven from the type of economic volatility we currently face.”

 

Here are eight reasons to buy overseas real estate right now

1. Discounts Due to Currency Advantages

When buying with USD or another strong currency, you can buy much more property in a market abroad with a weaker currency. Currently, the USD is at historic highs, meaning enhanced spending power.

The current surge in the value of the US dollar is producing unexpected opportunities for property investors holding the currency in many overseas real estate markets. It’s at historic highs against the euro, the pound, and other key currencies.

 

2. Currency Diversification

Buying a house overseas allows you to gain the benefits of diversifying into another currency. Currency diversification through property enables you to gain the benefits of earning an income or equity gain of the property in that country’s money.

Buying with the current strong conversion rate for the USD can also mean that even if the property value does not increase in local currency, you will have appreciation if the exchange rates return to historical averages.

 

3. Cheaper Properties

Besides the advantage of currency savings, properties in many overseas countries are highly affordable compared to properties in many US beach towns. “Caye International Bank facilitates real estate loans in five currencies and low-interest rates, with negotiable amortizations and terms,” says Wewege.

 

4. Earn an Income

Whether you buy a second home or have your eye on investing some money, overseas real estate can generate an income that can help pay for the property running costs and create a nest egg in the local currency. Even if you plan to holiday at your overseas property, you can rent it out short term to others.
Remember that most European countries have lower rental net yields for long-term rentals, but these increase with short-term rentals, especially in the coastal areas of the Mediterranean.

 

5. Privacy And Tax Advantages

Americans don’t have to report their personal or rental overseas property to the IRS. Therefore, your foreign property remains out of reach to lawsuits, your ex, and the US taxman.
There are also some US tax advantages when you rent out the property. For example, the interest paid on your mortgage is deductible from your taxable US income, as is the cost of trips to check on your asset.

 

6. Diversify Your Portfolio

Investing some money on overseas real estate diversifies your investment risk because it’s in another market. But, as we said earlier, you also diversify your exchange rate risk and avoid liability risks.

 

7. Brings Residency Perks

If you want to fast-track residency to countries like Greece, Spain, and Portugal to access the Schengen Area, you can purchase a property as part of their Golden Visa Programs. In addition, some countries like Northern Cyprus and Montenegro don’t have a price limit on how much you can spend to receive residency.

 

8. Low-Cost Vacations

Besides investing your money wisely, buying overseas real estate means you can choose a place to holiday without adding expensive hotel stays. As a result, you can enjoy the benefits of holidaying (or even retiring) somewhere with a lower cost of living, and you can escape the cold winters of the US.

 

Final Take

As you can see, buying overseas real estate makes perfect sense right now, especially if you want to diversify your investments and create an income in another country. In addition, your investment can provide you with a dream holiday destination and a financially secure retirement. For more information on investing offshore and in Belize real estate contact RE/MAX Belize!

 

By Luigi Wewege

Banking in Belize with Luigi Wewege

Banking in Belize with Luigi Wewege

If you are looking at Belize as a future destination for retirement, a vacation home or investment, it is important to have knowledge of the banking system. Having an understanding of the countries banking system and currency will help to ensure that your financials are properly taken care of. When looking at any foreign country as an investment it is important to know the currency, and how the system works.

That is why we turn to Luigi Wewege the Senior VP and Head of Private Banking at Caye International Bank (the only international bank on Ambergris Caye). He is an expert not only on banking in Belize but international banking as a whole.

In the video below, Luigi answers a number of the most frequently asked questions about Belize banking. Check it out;

 

 

FAQ Questions Answered in the Video:

  1. What is Caye International Bank?
  2. What is the Currency in Belize? What Currencies Can You Use in Belize?
  3. What are the Reserve Requirements in Belize?
  4. What is the Bank Secrecy Act?
  5. How to Open a Bank Account in Belize?

 

Key Takeaways

  1. The Belize Local Currency is the Belizian Dollar that remains 2:1 with USD. The Belize dollar is the official currency in Belize (currency code BZD). In Belize, the currency is normally abbreviated with the dollar sign $, or alternatively BZ$ to distinguish it from other currencies. That being said, USD is almost universally accepted. The official value is pegged at 2 BZ$ = 1 US$.
  2. Real Estate in Belize is listed in USD. This is important when not only looking at transactions but also holding the real estate in USD.
  3. Caye International Bank deals in a number of currencies; USD, CAD, Pounds, Swiss Francs, Euros.
  4. Belize Maintains a 24% Banking Reserve (4 or 5 times higher than banks in North America). This is important to look at as it is designed to prevent bank failures.
  5. Bank Secrecy Act. This act is designed to protect residents and non-residents as it ensures that sensitive and private information such as banking records or financial information about is protected and kept secret. The reason this is important is, all pertinent information about the company (identities of the shareholders, directors, and owners) are expunged from public record.
  6. Belize is British Common Law and holds Fee Simple Title that allows for Full Foreign Ownership.
  7. Luigi also shares the process of opening an account with Caye International Bank and how individuals can open an account without being in Belize.

 

If you have any questions regarding Banking in Belize email Luigi Wewege at lwewege@cayebank.bz