Investing in property abroad: A starting guide

Thinking of investing? If you have a nest egg or inheritance, or you’re an experienced investor already, you might be interested in buying property overseas.

This could potentially be a solid long-term investment, as well as giving you funds from renting out the property in the short-term. But there are also risks involved, along with fees, paperwork and some other hurdles.

In this guide, we’ll walk through some of the essentials you need to know about investing in property abroad. We’ll not offer investment advice (you’ll need to speak to a professional for that), but we will give you helpful info on the process of buying land or property abroad as a UK investor.

We’ll also look at some of the best countries for international real estate investment, info on financing options, and some of the perks and pitfalls of following this route.

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Key takeaways:

• Research legal and tax requirements before investing in overseas property.
• Choose between residential, commercial, or development properties based on your investment goals.
• Plan for currency exchange and management costs when buying property abroad.
• Use local professionals to navigate legalities and manage your property effectively.
• Consider countries like Lithuania and Ireland for favorable rental yields and investment conditions.

Types of properties you can invest in abroad

The first step involved in overseas property investment is to decide what type of property you’re interested in. Property falls into three main categories:

• Residential property
• Commercial property
• Land plots and development opportunities.

Residential properties

One of the most common types of property for British investors to buy abroad is residential homes.

This includes holiday homes, which you and your family can use and then rent out for the rest of the year. This gives you the best of all worlds - a home to enjoy in a country you like spending time in, a regular rental income, and an asset which should appreciate in value that you can sell in the future.

Other types of residential investment property include:

• Vacation rentals - usually located in a popular holiday spot
• Rental apartments and houses in towns and cities
• Luxury properties and developments.

Commercial properties

If you have the right experience, you might also want to look into buying a commercial property. This includes shops and other retail spaces, along with office buildings or even hotels, restaurants and other hospitality businesses.

The main benefit of investing in a commercial property is rental income, with the aim of getting the space occupied by a tenant as soon as possible. However, you may also harbour ambitions to run your own restaurant or other business.

Land and development opportunities

For the more ambitious, there’s also the option of buying a plot of land to develop. You may want to build an apartment block or a hotel, a new home or even a commercial property.

Buying land for development will involve navigating local planning and zoning laws, starting with making sure the land is suitable for use for your intended development and getting planning permission.

You’ll need to work with local professionals such as solicitors and real estate agents, especially if you don’t speak the local language. It can be complicated and there are many pitfalls to overcome, but it could result in a development that can be rented out or sold at a profit.

Read our guide to building and renovating property abroad for more info.

Step-by-step process of investing in property abroad

Now, let’s turn our attention to the process of overseas property investment. Is it the same as in the UK, or more/less complicated?

Let’s start with the main steps involved, although remember that this process is likely to vary by country:

1. Get your finances in order. You need to know exactly how you’ll finance your purchase, whether it’s savings, funds released by selling another investment or a mortgage. You’ll also need to figure out the best way to transfer money from the UK.
2. Check if you need a permit, permission, tax registration or any other paperwork. Whether you need anything like this will depend on where you’re buying. For example, you’ll need a Individual Taxpayer Identification Number (ITN) when buying property in the US, and a permit when buying property in Poland as a foreigner.
3. Do your homework on the legal restrictions in the country you’re buying in. This can help you understand any restrictions and conditions, as well as any taxes which may apply. For example, Spain is currently considering introducing a 100% property tax for foreign buyers, which could make any real estate investment there much more expensive.
4. Start searching for a property - you can use real estate websites and portals, a local estate agent, or a mix of both.
5. View properties, or send a representative to do it for you if you’re not in the country.
6. Make an offer, and negotiate the price.
7. Sign a preliminary contract and pay the deposit
8. Appoint a solicitor/conveyancer and complete the legal steps to finalise the sale. In some countries, a notary may be required to authorise the legal documents.
9. Finalise your mortgage, if you’re getting one.
10. Complete the sale, and take ownership of your new investment property.

Before you embark on any of the above, it’s really important to seek professional legal and tax advice, from specialists in the country you’re interested in.

Perks of investing in overseas property

There are many advantages to investing in property abroad, such as:

• Portfolio diversification - if you already invest in stocks and shares, for example, buying property helps you to diversify and therefore spread the risk.
• Currency diversification - an investing strategy designed to mitigate exchange rate risks and offer opportunities to profit from favourable currency movements.
• Potentially higher rental yields - you could earn more in rental income compared to the UK, depending on the country.
• Access to a vacation/retirement home - as well as investment, your family could benefit from a holiday home in an attractive destination.
• Routes to permanent residency and perhaps even citizenship - in some countries, property investment or ownership can be the first step to becoming a permanent resident.
• Hedging against home market fluctuations - if you already invest in UK property, you may want to diversify and mitigate against UK housing fluctuations by investing abroad.

Common pitfalls of investing in property abroad

When considering the pros of buying an overseas property, it’s also important to weigh them up against the potential pitfalls. These include:

• Currency exchange risks - fluctuations in exchange rates can impact everything from the cost of an overseas property purchase to rental yield, as well as the amount you potentially sell a property for.
• Legal and regulatory challenges - some countries are easier to buy property in than others. Likewise, some are more welcoming to foreign buyers than others.
• Distance management issues - you need to consider how easy/difficult it will be to manage your investment, especially a rental property, when you’re not living in the country. You may need to appoint a local agent or other third party to assist you.
• Tax complications - tax is always complicated, especially when it comes to matters between more than one country. You need to avoid double taxation, as well as understanding and managing your tax obligations between countries. Otherwise, you could face an unexpectedly large tax bill when you come to sell a property or start renting it out.
• Market volatility in unfamiliar territories - unless you have knowledge of a local property market (or are working with experts who do), you may be at the mercy of market trends and shifts. This could leave you facing problems such as an unsellable property, poor demand for a rental home, or high purchase prices in the middle of a housing bubble.
• Hidden costs and fees - real estate investments always involve more fees than you think, and it’s easy to miss some of these if you don’t speak the language or understand local rules.

💡 Read more: The best UK banks for sending money abroad

Managing cross-border real estate investments

It’s also crucial to consider how you’ll manage the money side of your cross-border real estate investment. This means finding the most cost-effective way to transfer large sums between countries, setting up a local bank account to receive rental income and paying fees and taxes.

There’s also the property itself to consider. How will you keep up with cleaning and maintenance when you’re not there? What about security when the property is unoccupied? And how will you manage tenancies remotely?

You’re likely to need a contract with a local agent, who will take the property management tasks off your hands.

Top countries for UK property investors

You may have your sights set on a particular country for your own reasons. For example, you might have existing connections or business interests there, or perhaps you have a holiday home nearby (which will be useful for checking in on your investment).

But it can also be useful to know which countries are considered to be among the best for UK property investors - offering relatively low property prices and buying fees, along with a decent rental yield. These could be a good starting point as you begin your search.

Let’s take a look:

Country	Avg. price per sqm (in city centre)	Avg. rental yield⁶	Buying costs⁶
Lithuania	£3,319.60¹	6.44%	3.45%
Estonia	£3,294.07¹	4.51%	1.3%
Romania	£1,850.04²	6.46%	3.2%
Ireland	£3,569.08²	7.85%	3.7%
Czechia	£3,979.91³	3.58%	6.7%
Hungary	£2,658.34³	5.75%	9%
Poland	£3,003.37⁴	5.75%	7%
Bulgaria	£1,831.96⁴	4.65%	10.5%
Croatia	£3,421.33⁵	4.78%	7.5%
Slovenia	£3,700.39⁵	4.45%	4.4%

How to choose a location for international real estate investments

Here are some of the key things to consider when choosing a country in which to buy property:

• Stable economy and housing market
• Areas with high growth potential
• Healthy rental yields and affordable property prices
• Low fees and taxes for purchasing property
• Foreigner-friendly policies related to real estate investment
• Accessibility and connectivity - a location with good links to transport and amenities
• Local demand - whether for long-term rental or short-term holiday lets
• Future development plans - such as transport improvements or urban regeneration projects.

Residency and citizenship through property investment

People have different reasons for investing in property abroad. In most cases, the motivation is financial. But you may also want to do it as the first step towards a permanent move to a particular country.

In some cases, you can get residency through property investment, and perhaps even citizenship too - or it can help to support such applications, at the very least.

For example, buying property in Thailand can potentially help to support your visa application.⁷ And in Greece, you can get a five-year ‘Golden Visa’ residence permit by investing €250,000 EUR in existing real estate investment opportunities.⁸

💡 Read more: Countries that offer citizenship by investment visa

Financing options for overseas properties

Underpinning all your efforts to invest overseas will be your access to funds or financing. If you’re not a cash buyer, you’ll need to get a mortgage from a local bank for your property purchase.

This can be easier said than done, as in many countries banks are unwilling or reluctant to lend to non-residents - this is the case when buying property in Japan, for example.

Your best bet is to use a broker, who can do the legwork and find you a financing solution.

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Sources used:

1. Numbeo - Property Prices Comparison Between Lithuania and Estonia
2. Numbeo - Property Prices Comparison Between Romania and Ireland
3. Numbeo - Property Prices Comparison Between Czech Republic and Hungary
4. Numbeo - Property Prices Comparison Between Poland and Bulgaria
5. Numbeo - Property Prices Comparison Between Croatia and Slovenia
6. Property Investor Today - Top countries to invest in property abroad
7. Conrad Properties - How Owning Property in Thailand Can Support Your Long-Term Visa Application
8. Get Golden Visa - Greece Golden Visa: The Ultimate Guide 2025

Sources last checked on date: 03-Jun-2025