Dec 15, 2021
Investing in real estate outside of your own country may sound like an intimidating prospect, but several things make it worth your while.
Here are five reasons to invest in European property, whether it’s commercial or residential:
- Europe is Booming
While Americans are still struggling with low-interest rates and stagnant wage growth, Europeans are reaping huge rewards from investing in real estate.
The financial crisis took its toll on most of Europe, but several countries have already seen their economies roar back to life.
Spain's unemployment rate is currently at 20% while Portugal's sits at nearly 14%, but both countries enjoy some of Europe's lowest interest rates. Those low interest rates make it cheap for investors to get into these markets.
- Rental Yields Are Greater Than Those in the US
The US, Canada, and Australia are often seen as safe havens for real estate investment.
However, when looking at rental yields—the difference between annual rents and property prices—property investors might be surprised to find better returns in Europe than in most English-speaking countries.
- It's Easy to Move Around
One of Europe's most significant advantages for property investors is it’s easy to move around. In addition, as property prices vary significantly between countries, you can choose where you want to invest based on price alone.
For example, Spain has some of the most affordable properties, while property in London is more expensive than anywhere else in Europe.
That said, location still matters when deciding what property investments are suitable for you.
- There Are Different Options When It Comes to Purchasing
If you’re interested in purchasing property overseas, keep in mind that multiple options are available to you.
There are plenty of real estate opportunities throughout Europe, but what works for one person may not work for someone else.
For example, if you’re hoping to live on your investment property but don’t have time to deal with renters or manage your tenants, it may be best to invest in a short-term vacation rental.
- Most Europeans Like Home Ownership
Even though many other first-world countries (e.g., Canada, Australia) are further along than Europe when building out rental properties, ownership is still widespread among Europeans.
There’s less competition for renters and more room for appreciation as your investment matures. At least 80% of all new construction in Germany was single-family homes rather than apartments or condos -- you just don't see that much here.
As long as people own their homes outright, they'll continue to invest in them and raise families there.
Buying property as an investment can be a great way to generate passive income and diversify your portfolio. First, however, you should know a few things before jumping into real estate abroad.
The tips we’ve outlined will give you a brief overview of what to consider when investing overseas and why it’s important to research any location or property before committing to it thoroughly. Knowledge is power, especially when it comes to financial decisions.
Make sure you know what you’re getting into before buying property overseas. You can always check with 1st UK Money to learn more about investing in European properties.