Investing in International Real Estate For Dummies

Nicholas Wallwork is a successful entrepreneur, multimillionaire real estate investor, developer, and property and business mentor. He is known across all media channels as a highly respected authority in the real estate investment world and has an extensive and proven track record for delivering successful, high-return investments for his clients and students. Wallwork is dedicated to helping educate investors. Visit www.propertyforum.com/ real-estate-courses for upcoming companion courses to this book.

• Introduction 1About This Book 2Foolish Assumptions 3Icons Used in This Book 3Beyond This Book 4Where to Go from Here 4Part 1: Building a Successful Real Estate Portfolio 5Chapter 1: Introducing Real Estate Investment Strategies 7Taking Your Real Estate Investments to the Next Level 8Comparing property to other asset classes 8Going beyond fixer-uppers and straightforward buy-to-rents 10Focusing on Investment Strategies That You Can Use Internationally 11Running Your Property Portfolio as a Business 12Getting Your Financial Ducks in a Row 13Understanding financing options and valuation 13Getting the expert help you need 14Blending Real Estate Strategies to Create a More Robust Portfolio 14Keeping an open mind about different strategies 15Incorporating shorter-term strategies into your portfolio 16Exploring longer-term strategies for earning a regular income 17Avoiding spreading yourself too thin 20So Which Strategies Are Right for You? 20Chapter 2: Investing at Home or Abroad: Which Is Right for You? 23Deciding Whether to Invest Abroad: It’s Not All about the Numbers 24Playing on your passion 24Tapping into available knowledge 25Considering Your Budget 26Assessing Your Risk Profile 28Identifying where you sit on the risk spectrum 28Considering country-specific risk factors 29Factoring your goals into the equation 31Figuring Out How You’ll Manage Your Property 31Drilling Down to the Right Market for You 33Looking at the cold, hard facts and figures 33Developing your knowledge of that country and region 34Focusing Your Attention on One or Two Key Markets 35Chapter 3: Treating Your Real Estate Portfolio as a Business 37Aiming for Passive Income as the Ultimate Goal 38Defining passive income 38Looking at examples of passive income 40Looking at the pros and cons of passive income 40Drafting a Dream Team 42Getting expert advice 42Outsourcing other aspects of your workload 44Finding and vetting experts, at home and overseas 46Getting the most out of your dream team 48Investing in Systems and Technology to Grow Your Business 49Putting the right processes in place 50Defining effective business processes 51Saving time through software 51Evaluating technology solutions 53Promoting Your Real Estate Business 53Managing Your Cash Flow Like a Boss 55Preparing for the rise and fall of income and expenses 55Maintaining a safety net with a cash buffer 57Getting the Right Insurance 57Insuring your properties correctly 57Making sure your chosen partners have the right insurance 58Chapter 4: Protecting Yourself against Market Fluctuations 61Diversifying Your Portfolio with Multiple Revenue Streams 62Investing for the long term and the short term 62Incorporating multiple strategies into your portfolio 63Seeking out other ways to diversify your portfolio 65Finding Strategies That Work Well in a Boom Market 65Working with the booming market 65Looking at suitable boom strategies 66Finding Strategies That Work Well in a Credit Crunch 68Working with the challenging market 68Looking at suitable crunch strategies 69Doing the Opposite of What the Mass Market Is Doing 71Tailoring Your Funding to Economic Fluctuations 72Understanding the impact on traditional finance 72Accessing nontraditional forms of finance 74Considering Foreign Exchange Rate Risks 75Chapter 5: Getting into the Mind-set of a Successful International Real Estate Investor 77Continually Improving through Education 78Tapping into a wide variety of sources 78Taking time for education before you put your money on the line 80Networking in the Right Places 80Networking offline and online 80Getting the most out of networking meetings and events 81Maintaining and nurturing your network 82Setting Your Goals 82Figuring out what you want 83Committing to and working toward your goals 83Cultivating a Positive Mental Attitude 85Using positive affirmations 85Embracing gratitude 87Visualizing for Success 88Identifying the benefits of visualization 88Putting visualizing into practice 89Getting the most out of visualization 90Harnessing the Law of Attraction 91Understanding how the law of attraction works 92Focusing on your thoughts and feelings 93Putting the law of attraction into practice 94Meditating to Manage Stress and Risk 95Looking at the benefits of meditation 96Making meditation work for you 97Part 2: Money, Money, Money 99Chapter 6: Weighing Traditional Finance Options 101Finance as a Key Element of Success and Growth 102Seeing the link between leverage and growth 102Understanding the full range of finance options 103Considering the Main Financing Factors 104Looking at the property itself 105Deciding between fixed-rate and adjustable-rate loans 105Looking at the length of the loan 107Finding the right loan-to-value balance 108Weighing up repayment versus interest-only loans 109Taking fees into account 110Assessing a Range of Traditional Finance Products 112Getting a standard residential investment mortgage 112Seeking a commercial mortgage 113Using a bridge loan 113Taking out a second-charge loan 115Getting land and development loans 115Finding the Right Product for You 117Dipping into International Finance versus Domestic Finance 118Chapter 7: Understanding Property Valuation 119Defining Value and Real Estate Valuation 120Comparing price to value in more detail 120Understanding the purpose of appraisals 121Looking at factors that influence value 121Knowing who values real estate 122Seeing Why Valuation Is Fundamental to Property Success 123Understanding enough to maximize your investments 124Knowing the difference between yield and return on investment 124Considering how valuation methods may affect your financing 125Recognizing that appraisers are risk averse 126Making your own valuation case 127Looking at the Three Main Valuation Methods 128Market comparison approach 129Income or investment approach 130Cost approach 132Knowing Which Method Is Best for You and How Much an Investment Is Worth 132Evaluating on a case-by-case basis 132Doing your own appraisal research 133Special Considerations for Valuing Property Abroad 134Chapter 8: Looking at More Creative Financing Options 135You Down with OPM? Investing with Other People’s Money 136Introducing the concept of OPM 136Looking at OPM as a route to real estate success and wealth 137Joining Up with a Joint Venture 138Knowing what’s involved in a joint venture 138Looking at examples of joint ventures 139Understanding why people would invest in you 139Finding the right joint venture partner 140Creating a compelling business proposal for potential joint venture partners 142Dotting the I’s and crossing the T’s with a joint venture agreement 145Securing Private Lending 146Finding and approaching private lenders 147Putting it all in writing 148Crowdfunding Your Way to Real Estate Success 149Getting Control of a Property Instead of Owning It 149Applying Creative Financing Strategies Overseas 150Part 3: One-off and Shorter-term Income Strategies 153Chapter 9: Developing Properties 155Knowing What Property Development Means 156Deciding Which Development Strategy Is Best for You 157Understanding why you need to think about the end before you start 157Looking at the main exit options 158Weighing which option is right for you 158Keeping your target audience in mind 159Giving yourself multiple exit options 160Sourcing Development Opportunities 161Assessing the property itself 161Deciding on the right location 162Finding the best properties (before anyone else) 162Financing Your Development Projects 165Understanding how development financing works 165Knowing whether you need a development loan 166Looking at other ways to fund your development projects 167Working out how much it’s going to cost 167Figuring out what improvements are needed 168Managing the Development 169Knowing where you need professional help 169Creating a detailed budget 171Creating a realistic schedule 174Communicating to keep the project on track 175Preparing the property for sale or rent 175Five International Locations Where This Strategy Would Work 176Chapter 10: Dealing in Property Information 179Dealing in Investment Property Leads: The Five-Minute Lowdown 180How does it work? 180How can you progress from an investment property sourcer to a retained buyer’s agent? 181Is this strategy right for you? 182Generating and Selling Property Leads 183Finding your niche 184Creating value for your clients by facilitating off-market deals 185Understanding the financial model 186Sourcing valuable properties 186Marketing the property to bring buyers and sellers together 190Acting as a Retained Buyer’s Agent 192Knowing what it means to be a retained buyer’s agent 192Understanding the financial model and agreeing terms with buyers 193Attracting buyers to your service 194Sourcing properties effectively for your buyers 196Five International Locations Where This Strategy Would Work 196Part 4: Ongoing and Passive Income Strategies 199Chapter 11: Making Rent-to-Rent Work for You 201Defining Rent-to-Rent: The One-Minute Rundown 202Addressing Rent-to-Rent’s Image Problem 203Applying Rent-to-Rent across a Range of Properties and Strategies 205What types of property are suitable for rent-to-rent? 205What approaches can you take to sublet the property? 205Which approach is right for you? 206Exploring change of use in more detail 208Margin in the Middle: Understanding the Rent-to-Rent Financial Model 209Looking at the startup costs 209Getting started on a shoestring budget 210Covering ongoing costs and earning an income from the property 211Sourcing the Ideal Rent-to-Rent Property (and Landlord) 213Evaluating potential properties 213Finding a landlord who’s open to rent-to-rent 216Positioning yourself as a professional rent-to-rent operator 217Sorting Out Your Rental Agreement 218Agreeing the length of the lease and other terms with your landlord 218Having a tenancy agreement in place with each of your tenants 219Finding Tenants and Managing the Property 220Finding good tenants 220Managing the property after your tenants are in place 221Identifying Five International Markets Where This Strategy Would Work 222Chapter 12: Leveraging Lease Options 223Understanding Lease Options and How They Work 224Breaking down a lease option into its component parts 224Looking at the pros of lease options 225Weighing the cons 226Deciding whether lease options are right for you 227Understanding the Financial Model for Lease Options 228Earning rental income from the property 229Earning capital growth on the property 229Selling the option instead of buying the property 230Understanding the “consideration” payment 230Considering ongoing costs 231Knowing What’s in It for the Property Owner 232Sourcing Lease-Option Opportunities 233Deciding what type of property you want and how you’ll operate it 233Looking for motivated sellers who would be open to a lease option 234Getting the owner onboard with a lease option 235Negotiating the Deal and Contract 236Your monthly rent 236The length of the agreement 237The purchase price 238The consideration 238Other safeguards 239Identifying Five International Locations Where This Strategy Would Work 240Chapter 13: Delving into Houses in Multiple Occupation 243Introducing HMOs 244Breaking Down the HMO Financial Model 245Sourcing HMO Properties 246Converting your existing home into an HMO 247Buying a property to turn into an HMO 248Deciding Who You Want to Rent To 249Finding the Best Location for Your HMO 249Staying on the Right Side of the Law 250Complying with HMO management regulations 250Sorting out planning requirements 251Dealing with mandatory HMO licensing 252Looking at the key health and safety considerations for HMOs 253Managing Your HMO 255Sorting tenancy agreements 256Finding and vetting tenants 258Managing your tenants and the property 260Scaling Up Your HMO Portfolio 262Identifying Five International Locations Where This Strategy Would Work 263Chapter 14: Renting to Students and Low-Income-Housing Tenants 265Knowing What’s Involved in Renting to Students and Low-Income-Housing Tenants 266Understanding why you may want to rent to multiple tenants in one property 266Identifying your tenants’ needs 266Looking at the Pros and Cons of Renting to These Tenant Groups 268Addressing the negative connotations and downsides 268Looking at the positives 269Sourcing the Right Kinds of Property for Students and Low-Income-Housing Tenants 270Finding the right location for students 270Identifying the right location for low-income-housing tenants 271Looking at the property itself 271Marketing Your Property and Finding Tenants 272Making sure the rent is competitive 273Enticing students to your property 273Attracting low-income-housing tenants 274Vetting tenants 275Drafting the Tenancy Agreement 275Choosing the right agreement 276Adding in additional clauses for these tenant groups 277Sorting out the security deposit 277Physically Preparing Your Property for Use 278Kitting out the property for your target audience 278Preparing for plenty of wear and tear on the property 279Making sure the property is safe for your tenants 280Managing Your Property Effectively 281Checking in on the property more regularly 282Managing tenants’ behavior 282Looking at Five International Locations Where This Strategy Would Work 283Chapter 15: Providing Serviced Accommodation 285Defining Serviced Accommodation 286What type of accommodation does it cover? 286What about the “serviced” part? 287Who stays in serviced accommodation? 289Looking at the Pros and Cons of Serviced Accommodation 289Taking a glimpse at the positives 289Assessing the downsides 292Deciding What Level of Service to Offer 294Covering the basics 294Wowing guests with personal touches 295Tailoring your offering to your target audience 296Sourcing Serviced Accommodation Properties 296Looking at the quality and size of the property 297Choosing the right location for your guests 297Preparing Your Property for Serviced Accommodation Use 299Planning for the practicalities of welcoming guests 299Getting the decor and overall look of the property right 299Equipping the property with everything your guests need 300Navigating Planning and Regulatory Restrictions 301Getting the Right Business Processes and Systems in Place 302Managing reservations 303Optimizing your pricing 304Marketing your property 304Managing Your Serviced Accommodation Business on an Ongoing Basis 306Identifying Five International Locations Where This Strategy Would Work 307Chapter 16: Providing Vacation Rentals, at Home and Abroad 309Knowing the Difference Between Vacation Rentals and Serviced Accommodation 310Choosing the Right Location for You 312Deciding which country is best 312Drilling down to the right location 313Doing your due diligence on the vacation market in your target area 313Planning for Costs, Cash Flow, and Variations in Occupancy 314Thinking of cash flow and costs from an annual perspective 315Understanding seasonality and void periods 316Overcoming seasonality challenges 317Sourcing the Ideal Property for Vacation Rentals 318Preparing Your Property for Use 320Providing the “wow factor” through service 320Including all the practical things your guests need 320Making sure your property is bursting with personality 321Making the property as season-proof as possible 322Paying attention to the exterior 322Making sure the property is safe and complies with local laws 323Marketing Your Vacation Rental 324Advertising your property on the right online platforms 324Having your own website 325Investing in professional pictures and awesome descriptions 325Cultivating great reviews 327Managing Your Vacation Rental 327Working with a managing agent 327Pricing dynamically throughout the year 328Identifying Five International Locations Where This Strategy Would Work 329Part 5: the Part of Tens 331Chapter 17: Ten (Or So) Practical Ways to Get into the Mind-Set for Success 333Tapping Into Education Resources 333Using Productivity Apps and Tools 334Learning to Be in the Here and Now 335Cementing Your Goals Using a Vision Board or Goal List 337Trying Out a Visualization Exercise, Real Estate Style 338Incorporating Positive Affirmations into Your Day 339Recognizing and Giving Thanks for Your Successes 340Downloading Helpful Apps 341Chapter 18: Ten (Or So) Other Real Estate Strategies to Consider 343Delving into Buy-to-Rent (Single-Tenant) Properties 344Flipping Houses 344Running a Bed-and-Breakfast, Guesthouse, or Hotel 345Owning or Running a Care Home 346Becoming a Real Estate Agent, Rental Agent, or Property Manager 347Investing in Real Estate Investment Trusts 348Offering Emergency Housing Accommodation 349Getting into Commercial Property 350Trading in Freeholds 351Index 353