Renting a property located abroad, how does it work?

To prepare for retirement in the sun, it can be interesting to buy a property abroad and rent it while waiting to move in. But what are the steps to follow?

Before buying a property abroad, take these precautions

When preparing a rental investment abroad, it is first necessary to define your project by going directly to the site to discover the characteristics of the city, identifying the most pleasant neighbourhoods and visiting nearby areas. It is not advisable to buy a property online without having visited it, so as to avoid any bad surprise later. It is also useful to learn about the characteristics of the local real estate market, including average prices per square meter. Beware of false bargains: what may seem cheap from the French point of view is sometimes too expensive compared to local market prices. The dynamism of the city can also be an important criterion. The most dynamic cities (especially capitals) are more likely to see their real estate value over time and it will be easier to find a tenant than in cities of modest size. For the search for a tenant, it is advisable to go through a local real estate network which can in particular take care of signing the lease written in the language of the country.

Take a look at taxation before renting

The purchase and lease of a property located abroad mainly raises questions about taxation. It should first be noted that property owned abroad must be declared to your country tax authorities for most owners. In general, the law requires that any property income, including from a property located abroad, be declared to the tax authorities in the same way as if the property were located in the country. However, many have tax treaties with each other, particularly in Europe, to simplify procedures and avoid the risk of double taxation. When building your project, find out if there is a tax treaty between France and the country where you want to buy your property. If the tax treaty indicates that the property income must be declared in the country where the property is located, the owner will have to complete each year a form sent by the tax authorities of the country concerned to declare his property income and pay the taxes.

How to finance a rental investment?
Simulating your rental investment’s financial rates and input