For a savvy real estate investor, putting your money into property outside where your home country is has its advantages. If it’s vacation real estate, for example, there are the obvious lifestyle benefits. Why toss your money away on hotels and Airbnbs when you can stay in a lovely home or condo while building equity at the same time?
There are challenges, yes. If it were easy, everyone would be doing it.
Then there are the revenue-generation benefits. While you’re not staying there, running a property rental business through short-term property rental companies like Airbnb and VRBO is a great way to generate additional income.
A property in Mexico, for example, where I owned, can generate hundreds of dollar per night in gross income. A big drawback, wherever you do this, is making sure you have a trustworthy property manager in place. That can be a substantial challenge, but it’s a topic for another day.
There’s another benefit, for those more on the adventure-seeking side, and for those seeking to truly diversify their holdings via an offshore strategy – “Golden Visa” residency programs tied to international real estate investment. These are immigration programs that allow individuals to more quickly obtain temporary or permanent residency in return for an investment in that country.
Now think about that. Like many of us, having grown tired of the divisiveness and toxicity in our respective countries, for example, here’s an opportunity – at least for the affluent amongst us – to really do something about it. There’s diversifying your portfolio, if you don’t want to bank everything you have at home.
The “Golden Visa” – A road to temporary or permanent residency for real estate investors
A “Golden Visa” can be real estate investments or other types, like infrastructure investments, or business activity where jobs are created. Real estate tends to be the most popular type of investment in this case, especially in country’s like Portugal. That has to do with the great returns real estate has been generating over the past few years. And what a way to boost the local real estate market.
Greece (5-year residency permit within 3-4 months), Cyprus (favorable tax regime, with a fast track to permanent residency in two months, with eventual citizenship in five years if conditions are met), Malta (residency within six-eight months, and eventual EU Citizenship), and Panama (permanent residency in one month) are some of the countries offering this. The U.S. and Canada do as well. This is something you can get for yourself and your family members.
Different countries have different investment options, but the benefits are huge. You and your kids can live there, and get healthcare. Your kids can go to school there. You can get better access to employment and other business and investment opportunities. Maybe there are more favourable corporate, financial or legal services in the country you are targeting.
There might be personal tax advantages by creating more of a multi-jurisdictional tax planning strategy. For example, talk to an expert about the rules on capital gains taxes. Are there exemptions there and how long must you live in the house as your primary residence to qualify? I remember the capital gains hit in Mexico being over 25 per cent when I sold – that was a kick.
And you can truly immerse yourself in your new country. That’s the one thing living in Mexico taught us – the personal growth by removing all attachments, getting to know the people and the culture at a deeper level. And if there is one thing the pandemic taught us – personal freedom, not being boxed into one living situation, is a luxury onto itself.
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Consult an expert
Most people hire experts like Offshore Circle to take them through the residency-by-investment process, because there are many steps and questions involved. There will be legal implications, that’s for sure. How does property title work in that new country? Every individual has unique needs and goals. Issues like the social and economic benefits of the country you are looking at, that country’s political and economic stability, language and communications and tax implications all come into play.
And what kinds of returns do property investments in those outside markets generate? Is there low inventory in those countries, and high demand for new construction? What kind of overall return will you see if you combine property equity growth with potential rental income?
It’s not cheap – you can’t get residency if you mortgage a property, it needs to be a cash deal. In Portugal, foreign nationals must make an investment in real estate valued at at least 280,000 Euros (around $279,000 USD, around $378,500 CAD). Having someone you trust to hold your hand along the way has huge advantages.
What Golden Visa program do you qualify for? Contact an advisor that specializes in international real estate investment to help you choose the country that best suits you and your family.