International Investing Mistakes You Don't Know You're Making

What's scarier than making a real estate investing mistake? Easy: It's making a real estate mistake you don't know you are making.

Most buyers looking at property opportunities abroad are full of confidence. The relatively affordability provides strong motivation and they feel sure they'll be able to get a good deal. After all, they've bought property successfully in the US. They know how real estate markets work.
Trouble is; things are a little different in many international markets. If you apply the same strategies as back home, you may inhibit yourself from getting a great property deal. How do I know this? Well, because I made a boatload of mistakes when I first started investing in real estate internationally. But now, with the benefit of hindsight and after working with other international buyers and sellers, along with managing properties worlwide, I've come up with some solutions.
The good news; the mistakes are not that hard to fix. Take a look to see if you're at risk of making one of these common mistakes:

Mistake 1: Only viewing real estate with one agent
This may work in the US where agents are tapped into the MLS - effectively a giant shared database of properties for sale on the market. But in many international markets, MLS type databases do not exist. Instead, each agent maintains his or her separate, private listing database. So by limiting yourself to one agent you are unlikely to see all there is for sale.

It's also important to realize that in many emerging markets anyone can sell real estate. So yes, this means chasing down a listing given to you by your hairdresser or going on a detour to see a property with your taxi driver.
The fix: Book a property viewing with every active real estate agent. Then spread the net even further and tell everyone you meet that you are in the market for a property.

Mistake 2: Buying a vision; not reality
You stand in awe of the glossy rendering. You count out the 18 holes of the golf course on the master plan in front of you. You imagine having a massage at the planned "Wellness Center" to ease out those golfing-induced knots in your shoulder. You start to schedule monthly visits to your vacation home. After all when the new road gets built it will only take an hour to get to your property from the airport …

Hold on a moment. You're about to buy the developers vision of what their project may look like in the future. You've looked past the current reality. Look around. How much of the proposed master plan has actually been completed? Take a worst case scenario and ask yourself how much your vacation property will be worth if the golf course never gets built, the wellness spa never opens and the road from the airport is never paved?
The fix: Pay based only on what you can actually see and touch. Don't pay the price for what your property may be like in the future, if all goes well.

Mistake 3: Catching a case of land fever
Land fever … sunshine fever … we've all had it at some point in our international investing careers. I mean how can you not feel that tingle of excitement when you compare the prices with back home? The anticipation of ownership builds, you see other people hunting down the deals, and suddenly you find yourself caught up in a panic fueled land grabbing frenzy. After all they're not making any more beachfront are they?
The fix: Slow down. Realize that you've let your emotions take over. Start to engage your head. Let the facts, hard data and dry mathematics drive your investing strategy, not hype and raw emotion.

Mistake 4: Not leveraging the current buyers market
The financial crisis has been tough on many international real estate markets. Inventories are high and the gap between asking prices and sales prices has widened considerably since 2008. Use this to your advantage. Remember that many sellers like to keep their 'official' prices firm but will offer incentives on the side. It means they can lower their prices without actually lowering their prices.
The fix: Negotiate hard, especially if you are a cash buyer. The market is advantageous to buyers so use that to your advantage.

Mistake 5: Not getting good legal advice
I've seen buyers purchase property without an attorney. I've seen them agree to use the seller's attorney or the real estate agent's attorney. I've seen them hire attorneys they are unable to communicate with due to a language barrier. These are all big mistakes that can create problems down the line.

You must have the title researched by an independent attorney who is representing your interests before you purchase in any international real estate market. Title insurance is not a requirement in many countries, but I'd strongly recommend it. The process of applying for title insurance will force your attorney to dig deeply into the title history of your proposed purchase. Insurance is typically inexpensive at a cost of around 1% of the insured amount in most regions.
The fix: Hire a competent independent attorney to conduct your due diligence and back this up by applying for a title insurance.

In short, international real estate investing can be an unbelievably profitable and enjoyable experience. But, you can't let your excitement get the better of you. There are a lot of companies in the USA (including T. C. Lewis & Co.) who can point you to the right people in regions of interest around the world, so use them before you plan a trip to visit your dream property abroad.

Follow on Social Media for First Dibs on Properties

If you're in the market for real estate and have already checked the local realtor listings without finding the right property, you don't want to go back to Zillow or Trulia every day to see what's new. And, you definitely don't want to look at the homes books in your area because they're always at least 45 days outdated when they first come out because of printing and delivery timelines. Instead, check out www.TCLewisProperties.com and/or follow a few local social media-savvy realtors who tweet or post newly listed properties on Facebook. At the T. C. Lewis & Co. website, you can create an account for yourself with no strings attached that allows you to receive newly listed properties matching your criteria as soon as they come on to the market, as well as saving favorites to revisit and comapre. And, you can search using a map tool, by type (home, condo, sale, lease, commercial properties, etc), by street, MLS number, and more. We currently provide searchable properties for all of Northeast Tennessee, Southwest Virginia, and Western North Carolina - and as we expand the business, we expand the areas that can be searched for properties. You can inquire from each listing for more information, schedule an appointment to see the property, or share the property with friends or family on social media sites of by email right on the property page.

Tenants or prospective tenants can search properties for lease on our site - both commercial and residential properties. We tweet updates of new properties, post them to Facebook, and put them on our site as soon as they become available. We also update existing tenants on our social media sites seasonally.

So, to stay up to date on the newest properties hitting the market before they get picked over, follow T. C. Lewis & Co. on twitter by going to www.twitter.com/tclewisco (@tclewisco). Or, 'like' us on Facebook at www.facebook.com/tclewisproperties. If you've already signed with a realtor you can still use this technique to feed them interesting listings from our office. Happy 4th of July!