Buying real estate abroad with a private loan is an attractive prospect for many investors and individuals. Whether you want a second home by the sea in Portugal, an apartment for rent in Thailand or a country house in Tuscany, there are many opportunities to explore. But how to finance such a purchase? For Swiss residents, private credit offers an advantageous solution.
- What is private credit?
- Why opt for private credit
- Country of interest for a real estate investment
- Pay attention to certain aspects
- Lica services for your credit
- Our conclusion
What is private credit?
Private credit, often requested by private individuals in Switzerland, is distinguished by its ease of obtaining. Unlike other forms of credit, it is not directly linked to the real estate object. This means that the buyer has the freedom to do whatever they wish with the funds, providing great flexibility in the purchasing process. Before submitting a request for buy real estate abroad with a private loan, it is however important to check that you meet all the required criteria. Our article “ What documents are needed to obtain a loan? » can help you properly prepare your application.
Why opt for private credit for a property purchase abroad?
When considering purchasing property abroad, financing is often the main challenge. Swiss private credit is an increasingly preferred option for the following reasons:
- Attractive rates: One of the great advantages of Swiss private credit is the competitive interest rate, making long-term financing more affordable.
- Flexible duration: With a typical term of 120 months, borrowers benefit from an extended repayment horizon.
- Financing from Switzerland: Even if the property is abroad, the financing is carried out from Switzerland, providing a certain familiarity and confidence in the process.
- Tax deduction: Interest on private credit is tax deductible in Switzerland, allowing additional savings.
- Speed of purchase: Without a direct link to the real estate object and without the need for an appraisal of the property, the purchasing process is accelerated.
- Freedom of use: Without restrictions on the use of funds, buyers can negotiate better purchase terms or explore various real estate options.
However, it should be noted that the maximum amount to buy real estate abroad with a private loan is generally CHF 400,000.-, which can limit the scale of the investment.
Country of interest for a real estate investment
With a world of opportunities, it can be difficult to decide where to invest! Here is some countries considered promisings to buy real estate abroad with a private loan. This, because of their economic growth, political stability, and potential rental yields:
- Portuguese: The Golden Visa program has attracted many foreign investors. Additionally, property prices in Lisbon and other tourist regions have been growing steadily.
- Greece: Similar to Portugal, Greece offers a visa program for investors. Athens, in particular, has seen an increase in real estate investment.
- Vietnam: With rapid economic growth and increasing urbanization, Vietnam has become a popular investment destination.
- Mexico: Destinations like Tulum and Playa del Carmen have attracted many foreign investors due to their tourism potential.
- Türkiye : Istanbul and other major cities have seen an increase in real estate investment, thanks in part to government incentives.
However, it is essential to note that buying property abroad with private credit can involve risks. It is therefore crucial to do thorough research and consult local experts before making a decision. Lica can help you obtain your private credit but you must nevertheless take the steps related to the acquisition of your property with caution!
Before buying real estate abroad with a private loan, pay attention to certain aspects!
Purchasing real estate abroad with a private credit is certainly an attractive option, but it requires careful consideration. Here are some aspects you should pay attention to before you make your purchase:
- Land register : find out about the operation of the land register in the country concerned.
- Associated fees : just like in Switzerland, you will have to pay various fees when purchasing your property.
- Tax system : find out about local taxes and tax treaties to avoid double taxation.
- Management by a real estate agency : for greater peace of mind, it is recommended to purchase from recognized agencies. You can also entrust the management of rentals to an agency to avoid problems.
- Location of the property : the geographical location is essential if you plan to rent it.
- Have the property appraised : standards abroad differ from those in Switzerland. Expertise can save you from unpleasant surprises.
Although purchasing real estate abroad with private credit offers an excellent investment opportunity, it is crucial to approach this decision with caution and preparation. Careful study and planning can help you avoid common pitfalls and maximize the return on your investment.
Why use the services of Lica to buy real estate abroad with a private loan?
Lica is your ally! We carefully examine private credit offers available to direct you towards the best option. We are at your side from the search for financing until the actual purchase of your property abroad. Lica offers you for free:
- Identifying financing suited to your situation;
- Personalized support to make your project a reality;
- The know-how of a multidisciplinary team;
- The best financing offers on the market;
- The highest approval rate in Switzerland.
Unfortunately, Swiss banks generally do not finance real estate located abroad. However, some foreign banks do it, but this process is often complex. This is why it is crucial to be well informed and prepared. Additionally, obtaining credit in a foreign currency may present risks related to exchange rate fluctuations.
Our conclusion on purchasing real estate abroad with private credit
Buying real estate abroad with a private loan is an ambitious approach that can offer advantages as great as its challenges. Opt for one funding through a Swiss private loan can therefore bring a series of benefits for the borrower. The main attraction of private credit lies in its flexibility. Without having to allocate the loan directly to the real estate object, the borrower benefits from great room for maneuver. This freedom is reinforced by competitive interest rates as well as tax advantages, notably interest deductibility.
However, as attractive as this method of financing may be, it has aspects that should not be overlooked. It is vital to fully immerse yourself in understanding the target country's real estate market, guard against the risks of currency fluctuations and think about property management, especially if done remotely.
Do you have questions about establishing an acknowledgment of debt? Our advisors are there to answer your questions 7 days a week directly on WhatsApp. Ask us for more information and we will be happy to answer you!