What to Consider When Investing in Property for Citizenship
October 27, 2016 - Guide
Investing in property is one of the most popular routes to second citizenship.
Real estate offers the best match of mutual interests – the country offering second citizenship benefits from your investment directly through building long-term physical assets and using local providers, and you benefit from gaining a legal second citizenship. You also have an asset in hand that you can sell after the initial holding period.
But what should you keep in mind when picking a property to invest in via a Citizenship by Investment Program.
Location, location, location
Like all property investments, location matters. Pick an approved project in a prime tourist area or CIP destination with good air links and solid tourism infrastructure and you can look at earning good returns on your investment when you decide to resell or rent out your property.
Use a trusted advisor
Work with a CIP consultant who has strong local links, who regularly visits the country you wish to buy property in and who can offer dependable and accurate advice. Ensuring the property you buy has intrinsic worth is key. While all agents receive a commission from developers, some developers offer extremely high commissions of up to 25% to agents – that should be a red flag that the property itself may be of questionable long-term value. When working with developers, the agent's paramount duty should always be to the client – good agents only work with developments that have been inspected and vetted personally or by a member of their team and whose quality they can vouch for.
A good CIP agent is also handy at the contract preparation stage as he or she will vet contracts on your behalf, pick the best units within a complex and negotiate the best terms of purchase.
Read the fine print
When paying property reservation fees, some agents charge a percentage of the value of the property while others charge a fixed fee of between USD10,000-USD15,000. Whatever you pay, always ensure that the property reservation fees are fully refundable in the rare case your application isn’t approved.
Choose developers with a good track record
Badly maintained properties depreciate quickly. When choosing a property, favor projects that are backed by a well-established and experienced team that has a proven track record and offers a turn-key management and maintenance contract. Many projects manage rental pool returns and guarantee a fixed rate of rental returns during the initial period of investment. Shop around for the best packages that protect the long-term value of your asset and generate income during the holding period.
Interested in knowing more about Citizenship by Investment through the real estate route? Email [email protected] or call +97145541449 and we will be more than happy to assist. For updates follow PassPro on LinkedIn, Twitter @PassProNews or Facebook/PassProCitizenship
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