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Buying property can sometimes be a step towards residency or even citizenship. Programs like the Golden Visa in the UAE or the property residence permit in Türkiye let you settle in the respective countries for the long term if you commit to owning real estate.

Moreover, owning property abroad can be a good investment. Real estate tends to appreciate in value over time and can be a source of stable rental income once you've relocated.

With all that said, buying property abroad is rarely easy. You will need to research the market, study related regulations, find reputable agents, and, overall, think about a lot of things you probably wouldn't have to think about back home.

And then there is the money. Buying property outright may not be for everyone. In fact, according to CBS, average Americans now can't afford to buy a home in 99% of the country. But if you've thought about it and still want to buy a house abroad, what are your options?

Traditional property purchase

Well, first, there is the classic approach – you can buy real estate outright. In this case, you will contact a real estate agent, see available options, secure the funding, and make the purchase. This often involves applying for a mortgage, which can be more complicated for expats.

The cons of this approach are obvious – high initial costs. Purchasing property outright requires a substantial outlay, including the down payment, legal fees, and other related costs. This can be financially straining – and potentially much more difficult to handle in a foreign country.

Securing a mortgage abroad can be another challenge. You will be dealing with different banking regulations, eligibility criteria, and potentially higher interest rates for non-residents. Collecting all the needed documents can also be an issue as you have to send over missing papers from home.

Rent-to-buy properties

Then there is the rent-to-buy option, also known as rent-to-own. This is a real estate arrangement where you rent a property with the potential to buy it later. This is a mix of renting and buying and can be an appealing alternative for those who do not qualify for a mortgage or are not in the position to put up a large amount of money upfront.

When you sign a rent-to-buy agreement, part of your monthly rental payments will go towards the eventual purchase of the property. This arrangement will allow you to build equity in the home while living in it, making it slow but steady to ownership.

Rent-to-buy agreements usually include a lease period (this is where you rent the property) followed by an option period (this is where you can choose to buy the property).

The specific terms of a rent-to-buy agreement can vary a lot. But it will often include the purchase price, the portion of rent applied to the purchase, and the duration of the option period.

The best thing about the rent-to-buy arrangement is the low initial investment, especially when you compare it to a traditional purchase. Here, you are not making one huge down payment – but instead paying a much more manageable option fee and regular rent.

Another advantage of renting to buy is that you get to live in the property before you purchase it. This gives you the time to explore and experience the neighborhood – which is especially important if you have just relocated to a new country. Then there are some drawbacks too.

Rent-to-buy agreements can lead to higher overall costs. The eventual purchase price will be locked in at the time you sign the agreement. And, if the property depreciates over time, you may end up paying over the market value. Additionally, if you decide not to purchase the property at the end of your lease, you will lose the premium portion of your rental payments.

Rent-to-buy agreements also tend to be quite complicated. They often come with intricate terms and conditions, and you may need to negotiate quite a bit. Now, when you are in a foreign country, all of these are the things expats prefer to avoid.

Co-ownership

Co-ownership, also known as shared ownership, is an arrangement where several people come together to own property. This can be done in a number of ways. For example, you can go with fractional ownership, where each participant owns a percentage of the property, or joint ownership, where everyone has an equal stake.

The apparent benefit of co-ownership is that you get to pool your resources with other people – so you don't get to be alone with this massive financial commitment.

As you can imagine, co-ownership agreements tend to be complex as they need to clearly define the rights and responsibilities of each owner. These agreements specify the percentage of ownership, financial contributions, decision-making, dispute resolution, and lots more. You will also need to discuss shared responsibilities such as maintenance, property taxes, and any other associated costs.

The biggest issue with co-ownership is the potential for conflict. Many things here can cause a disagreement in this arrangement – from finances to maintenance. Another drawback is that you will only have limited usage of the property. You will need to plan around other people's schedules, which can get tiring with time.

With that said, this can be a workable arrangement, specifically for expats who split their time between different destinations. It can also be a way to secure residency or even citizenship based on property purchase for you and your co-owners if you are unable to do it on your own.

Elena and Michael bought property in a small town in Alicante (Spain) together with their friends. Both couples traveled there regularly, and it looked like a win-win solution for not paying the high rent. "It was a very good setup at the start", - Michael says - "We liked staying here in the winter, and our friends were here for the summer. It was great for a few years. But then we ran into some maintenance problems, and there was a big bill to pay. We are still "discussing" who should pay how much".

Buying off-plan property

When you buy off-plan, you are buying a property that doesn't exist yet. This may sound strange when worded this way, but it's actually common practice in real estate. Buying off-plan means buying a property that is still under construction – or maybe just a blueprint.

One of the most attractive benefits of buying off-plan is the lower purchase price. As the property in question is still being developed, you get to buy it at a substantial discount. You can also expect the property value to rise quickly after it's been completed – thus, buying off-plan can be a good investment.

When you buy a property that is still under development, you may have more options to customize it. You will also be the first one living there, so you won't have to deal with the wear and tear from previous owners.

But buying off-plan property isn't without hurdles – especially if you are abroad. The biggest concern would be potential delays. Many things can affect the speed at which the project is completed – and the date you can start occupying your property can be pushed back. If you are an expat in a foreign country counting on the property to be ready by a specific time when you will be moving in, this may not be the most secure option.

Another factor to consider is that expats may lack the proper knowledge to make informed decisions when buying off-plan. You may have limited access to information when you are in a new destination. For instance, you may not know if the development company working on your future residence has a good reputation. You may also not be aware of all socio-economic and other factors that will affect how quickly the project will be ready.

Finally, you are taking a risk by not knowing exactly what the final result will look like. This was something Maria experienced after buying her apartment in Türkiye. "When we were choosing our apartment in the complex, we were shown a plan of where each apartment would be. We picked the one on the very edge of the garden, far from the entrance and swimming pool, with a small private area underneath the balcony. But when the complex was finished, we were very surprised – our apartment was now right above the security guard's booth and next to the entrance."

Leasehold property purchase

Leasehold purchase is when you own the property itself but lease the land on which it stands. This basically means that the building you live in belongs to you – but the land that it stands on belongs to the landlord. How long the land lease lasts can vary a lot, with leases often ranging from 30 to 999 years. Shorter lease times are more common, though - specifically 99 and 125 years.

Interestingly, sometimes you may be leasing the land not from the landlord but from the government. For instance, this is how home ownership works in China. When you buy property in the country, you are actually leasing the land it stands on from the government for 70 years. Leases are automatically renewed when the first 70 years expire.

One expat in China explains: "When my wife and I first started talking about buying an apartment in Guangzhou (a city in the South of China), I didn't think it was a good idea. I am American, so the idea of not actually having any rights to the land my house is on sounded ridiculous to me. But we did end up buying a small apartment, which has now tripled in price. So, this has been a good investment so far. But what happens when our land lease expires? Honestly, I am still concerned".

Buying leasehold property is often less expensive than buying freehold property – but this is not the case in China, for instance, as freehold properties are not available at all.

The most obvious drawback of purchasing real estate on leasehold is limited ownership. This can also impact the value of the property, making it harder to sell. Then, you also need to factor in the uncertainty that comes now, knowing if your land lease will be renewed.

So, here's what we know so far: there is more than one way to get your dream home abroad. If you are looking to save on the initial purchase cost, you may have quite a few options at your disposal. Keep in mind that different countries also may have their own peculiarities and opportunities when it comes to buying real estate. One good rule to follow is to always do plenty of research before committing to a real estate arrangement.