The Ultimate Property Scouting Checklist

Consider the following fundamentals of real estate acquisition, which we’ve organized according to the two agendas at work here.

First, considerations related to your personal-use agenda:

How Much Space Do You Need? Do you want an apartment or a house? One bedroom or two? A back garden and a swimming pool? A guest room or even a guest house? If you intend to let the place out when you’re not in residence, balance your personal space requirements against what kind of property rents best on the local market.

Where Do You Want To Be? In the heart of downtown…or out in the country? On the coast or overlooking a river? In a gated community, a local neighborhood, or off on your own with undeveloped acres between you and your nearest neighbor? Consider climate, traffic patterns, transportation (where you settle determines whether you’ll need to invest in a car, for example), the convenience factor, and nearby amenities (shopping, restaurants, nightlife, parking, etc.). Again, if you intend to rent the place out part of the year, balance your own location preferences with an understanding of which regions or neighborhoods are most sought-after by renters.

Furnished Or Unfurnished? If you buy unfurnished (which you’re typically going to do, unless, say, you buy from another expat who’s interested in selling his place including all contents), where and how will you source furniture?

What’s Your Budget? Everything follows from this. Be clear on it before you start shopping. I’ll walk you through a Cost of Acquisition budget for the purchase of real estate overseas later in the program.

Now, considerations related to the investment (profit) agenda:

The Path Of Progress. This is a key factor when buying for investment but important if you’re buying a retirement or second home abroad, as well. What infrastructure improvements are planned? A new airport, new train station, new highway, new hospital, etc., can mean a new universe of potential buyers…which is good news if you’re buying as an investor looking to develop or to flip. These things, though, also translate to better living.

Inventory Supply And Demand. In Panama City back in 2010 or so, for example, a glut of high-rise condos began coming online. These units were launched and sold pre-construction over the preceding half-dozen years. Once they were being delivered, their volume was one reason Panama’s capital market softened.

Costs Of Acquisition. Remember that they go beyond agent commissions. Depending on the market, they can also include: legal fees, notary fees, registration fees, title insurance (if you can get it—it’s almost entirely unavailable outside the United States), and transfer taxes (sometimes called stamp duty). In Ireland, for example, stamp duty can be as much as 9% of the purchase price. This point is important whether you’re buying for personal use or for investment, of course, but it becomes important in a different way in the context of making an investment. In this case, you want to be sure to factor in all costs of acquisition so as to have a realistic expectation of return. Again, more on this later in the program.

Carrying Costs. Including: maintenance (a house on the beach requires a lot of it, for example); a caretaker (if you won’t be in residence full-time yourself); property taxes (not every country charges them, and, in some countries, they’re negligible); income taxes (if you’ll be earning rental income); capital gains taxes (when you eventually resell… again, not every country charges them); other local taxes; property management expense (you’ll need a property manager if you intend to rent); rental management expense (separate from property management and, again, necessary unless you’re going to manage all the details of your rental investment yourself… something we don’t advise); and homeowner’s association/building/condo fees.

Economic Outlook. Critical if you’re buying for investment, but you don’t want to ignore the market climate even if you’re buying purely for personal use. Markets move up and down… and then up again. At what point in this cycle is the market where you’re thinking about buying right now? In which direction is it moving?

Opportunity For Diversification. In terms of market, type of investment, type of property, and currency.