If you’ve been thinking of expanding your real estate business, then it may be time to think about going international. There are a number of reasons why this is a lucrative idea, but chief among them is that spreading your assets across different areas always gives you more security, and with property, the best way to weather economic storms is to own it in different countries. This is easier said than done, however, because expanding into the international marketplace is no easy feat. What do you need to know to make a success of it? What are the key areas on which you need to focus?
Understand how different countries do business
The biggest challenge in expanding internationally is that no two countries do business in the same way. Each has different laws and regulations relating to the purchase and development of property. Different licenses may be required, and there are also different customs that affect negotiations and the settlement of deals. It is, of course, a big help if you speak multiple languages, but it’s also important to learn the proper etiquette for each country that you work in so that you can be sure of making a good impression. In addition to this, you’ll need to have a good sense of the factors influencing each individual market, such as internal migration patterns and attitudes to renting. This way, you can be confident of the long-term value of what you invest in.
Study, research and learn
Because the above issues are so complicated, there are specific university and college courses that you can take in international real estate. You can also learn by studying those who have made a success of it, such as Axel Preuss-Kuhne, the German-born investor who co-founded Robax Investments in Miami and went on to develop interests in El Salvador real estate as well. You can boost related knowledge at any time by studying languages through books or the Internet and following the news in the countries that you’re interested in. This will give you a well-rounded understanding of the social and political factors that are likely to impact their property markets. You’ll also need to study a bit about international relations, especially in relation to economics.
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Keep it manageable
When you’re ready to expand, it’s advisable to do so in one country at a time and spend some years getting to know each new market hands-on before you move on to another. It’s also wise to concentrate on just one or two property types in each jurisdiction so that you keep to a minimum the amount that you need to learn. If these are property types that you’re already familiar with at home, then you’ll find that this knowledge will remain useful in other countries. Although there will be differences, there will also be many areas of similarity. Being recognized as an expert in an area will also boost your negotiating power.
Find good partners
No matter how well you educate yourself, nothing beats local expertise, so if you really want to be a success in other countries, then you need to partner with people who are based there. This could mean working closely with a local real estate company or building relationships with property scouts, legal experts or letting agencies in your desired area. You will need to connect with local renovation companies and find out whose work that you can rely on. The easiest way to do this is to expand your social networks into other countries and approach embassies and business associations to try and get invited to networking events there.
Stay up to date
Once you’ve established your business abroad, you’ll have to maintain it. This is an area where it’s all too easy to slip up. All too many business owners step back and cease to pay proper attention once they’ve got the basics in place. If this happens to you, then your market information could get out of date. Also, the standard of your partners’ work could slip, or you could find what seemed like a strong set-up overtaken by certain events. Ultimately, the only real way to succeed in international real estate is to never take your eye off the ball. You need to stay connected to each country where you operate as if you were living there yourself.
If you’re prepared to make this commitment and put in the work needed to sharpen up your skills, then there’s no reason why your international real estate business shouldn’t be a success. It’s up to you to make it happen, and when you do so, you’ll reap the rewards.