12 Critical Questions You Should Ask Before Buying Real Estate Overseas
By Mike Cobb
- Is there year-round access to the area? And what is the drive time from the nearest airport? Not all roads are accessible year-round in Nicaragua, for example, or in any of the countries in this region. Understand not only how far a piece of property is from the nearest airport, but what road you must travel to get back and forth.
- How is security provided at the property? If you’re buying into a private development, you should expect 24/7 security at the entrance with back-up from local and national police.
- Where is the nearest medical care facility? How many minutes to get there by car in both the wet and the dry seasons?
- Can you buy title insurance for the property from a reputable title insurance company? If the answer is no, you should seriously reconsider the purchase. This is a big red flag.
- Is there a building requirement? This may or may not matter to you, but you should understand that if there’s no building requirement, you could be buying into a ghost town.
- What construction and design standards are in place? Zoning is almost non-existent in Latin America, and, unless covenants and building restrictions are put in place, you may not like what your neighbors decide to erect next-door.
- What is the current, existing infrastructure? Buy what you see. Do not take for granted that further infrastructure will be installed, and do not believe every infrastructure promise a developer makes. If you see paved roads, then there are paved roads. If you see a clubhouse, then there’s a clubhouse. I say again: Buy what you see. And make sure the price reflects that current reality. Don’t pay a premium for “planned infrastructure.”
- Is there enough water and water pressure? Is there hot water? What’s the plan for waste disposal? Either the developer has installed these systems and covered the costs…or he hasn’t. But if he hasn’t…who’s going to? (Here’s a hint: The answer is you.)
- What are the plans for a Home Owner’s Association? Are the fees realistic given the level of infrastructure and amenities? You should worry about low fees, because they may result in surprise assessments down the road.
- How will you build (if that’s your plan) from thousands of miles away? Who will oversee construction for you? And what’s included in the cost? You want to see written specifications, and you want to make sure they include 220v water heaters and air conditioners and hot water lines to the sinks and showers. And you want to confirm whether or not they include lights, fans, faucets, fixtures, and appliances. Assume nothing.
- What amenities and green areas exist? Pools, parks, golf, tennis, fitness, clubhouse, etc. Again, buy what you see. And ask about the plan for care and maintenance.
- Is the development company financially sound? Do they have a track record?