What is Cross Border real estate investment and why has it become so important in the last couple of years? The term corresponds to the acquisition of properties outside the investor’s home country. In this scheme, people around the world have the opportunity to expand their investment portfolio in emerging markets such as Mexico, Spain and the United States. Let’s take a closer look at the benefits of Cross Border Real Estate investment.
Main benefits of Cross Border investment in Real Estate
Portfolio diversification
According to the latest study by Jones Lang LaSalle, cross-border real estate investments during 2022 experienced a significant slowdown. This was mainly due to high inflation risk premiums and the risk of a global recession. However,the real estate consultant’s outlook is that during 2023 we will see a rebound in the real estate investment market, which will support greater liquidity for industries in major cities around the world .
Increased profitability
Mexico and Spain offer profitable investment opportunities in luxury real estate. The appreciation of property values in these countries has been increasing in recent years, giving investors the possibility of obtaining an attractive return on investment. At Nolab we developed a winning methodology focused on cross border investment in real estate assets. Through an agile and transparent process, Nolab provides an on-the-ground purchasing system where investors from around the world can find their ideal property from a select catalog of pre-qualified properties, as well as legal, tax and immigration advice, all in one place.
3. Tax benefits
According to the regulations of each country, there are a variety of tax benefits for foreign investors to purchase properties in destinations such as Mexico, Spain and the United States. For example, in Spain there are purchase facilitiesThe investor will also be able to enjoy a more attractive tax scheme and extra expenses for buying a property if the investor incorporates a company in the country to carry out its operation.
In order to know the tax benefits in the purchase of properties in each country, it is essential to carry out a thorough research of the market in each country, even in each state, province or district, since laws may vary.
4. Geographic diversification
Cross-border real estate investment allows investors to have a presence in different countries and markets, which gives them the opportunity to diversify their portfolio and reduce risks.
5. New lifestyles
Investing in emerging markets such as Mexico and some areas of Spain brings great benefits to investors depending on the type of use of the property. If the investor is looking for a property to live in at any time of the year, he will be able to enjoy a paradisiacal lifestyle and improve his quality of life in cities thanks to the privileged climate, culture and history of the area.
On the other hand, owning a property in a destination of steady economic growth, The capital gains of these destinations are also obtained thanks to the appreciation of these destinations, which can be seen in the direct sale of the property in the future or in the leasing of the same. It is important to go back to point 3 and do the relevant research according to the laws of each country to find out if it is possible to lease and what the conditions are.
Recommendations for foreign investors interested in buying properties in Mexico and Spain
Investing in foreign real estate can be an excellent opportunity to diversify your portfolio and obtain attractive returns. But as with any investment, it is important to consider certain factors in order to make informed decisions.
- 1. Conduct a thorough research of the real estate market of the country or region in which you wish to invest, as well as its culture and the way business is done to avoid misunderstandings and to live a pleasant process.
- 2. Establish a clear strategy and an adequate budget before you start looking for properties. For example, in the best areas to live in Mexico City you can start with a budget from $250,000 USD, while in destinations like Madrid or Malaga in Spain, you can start with budgets from $600,000 € and get your Golden Visa.
- 3. Look for properties with an attractive location and long-term value growth potential. These can be found in vacation destinations or near the main business centers of each country.
- 4. Consider working with a local real estate agent to get advice and find the best properties available. In addition, having local talent and specialists will help you better penetrate the culture of the area and get better prices.
- 5. Make sure you have a solid financing plan with a local financial institution. and an exit plan in case you need to sell the property in the future, it is advisable not to lose contact with the team of real estate specialists who will accompany you in your investment process.
We hope you find this information useful for your next investment. Contact us and get personalized advice for investment in the best destinations in Mexico, Spain and the United States.
