If you are thinking of ways to diversify your portfolio or expand your business outside the borders of your country, then investing in a property on a foreign market can be just the right option for you. Regardless of your motivation, you stand to significantly increase your income, providing that you approach the investment strategically and prudently. 

However, it is understandable to be cautious, even reluctant because your city and country are your home turf and you know your way around it but by planning and preparing everything in advance, you will leave little room for mistakes. That being said, here are the top 5 mistakes entrepreneurs make when investing internationally so that you can avoid such traps. 

Not making an informed decision

Although for most people this piece of advice falls under the category of ‘it goes without saying’ but this is not true for everybody. Some entrepreneurs get enthusiastic about their business doing so well and so they decide to invest what they earn almost blindly, without assessing which foreign market would be the best choice.

For instance, a successful business owner might want to obtain a property that can at some point be turned into office space for a branch of their business but for that to have any financial sense, you need to opt for a country where your services or products can have a shot at succeeding. And if you already decided where you want to direct your investment, your business doesn’t necessarily need to be expanded there – the investment can serve just as an additional source of income. 

Going all in

Let’s say that you have done comprehensive research on some exotic markets whose prospects seem attractive to you. Suddenly, you decide that the time is right for making an investment and that you should go all in. You may think that it is brave to invest your entire savings at one prospect and although it is true that you cannot make a change from your comfort zone but a move like this is not the most rational one. 

Before you dive headfirst, you need to be aware that sometimes these investments don’t turn out to be as lucrative as people think they would be, and not to mention potential scams related to you entering a market where you are a foreigner without any experience with collaborating with that culture. Make sure that the amount you invest is mostly the money you can spare and you definitely need to keep some of your savings.

Fail to check legal requirements

There are a lot of things that you can disregard or that can go wrong but investing without a thorough knowledge regarding your rights and obligations is something which can bring you the most trouble. Failing to tend to your legal obligations can mean losing your investment and, in some cases, you might have to give up on more of your hard-earned money. 

This is why you need to do detailed research on the legal side of investing in foreign markets and preferably consult the local experts, such as Invest Islands investment company that are experienced consultants regarding investing in Indonesia. What you can learn from such experts are the types of ownerships in Indonesia or another market of your choosing, the taxes, necessary permits, and many other essential elements which can ensure your investment has a potent legal stronghold. 

Not learning about the local culture

Here’s a simple reason why you need to know about the local culture: you purchase an apartment in, let’s say, Kairo, with the intention of finishing the construction (adding window frames, air conditioning, etc.) and selling it for a higher price. This location might seem perfect because of the proximity of grand historical monuments but not their local culture, you would be making a mistake: the salary of most Egyptians is extremely low so they live for years in apartments without windows because the climate allows it, while the richer population wouldn’t want to live in such neighborhoods. 

Also, if you plan to expand your business to the location of your foreign investment, not bothering to learn about their culture might doom your business expansion because, for instance, the packages of your products are orange, which is considered to be the color that brings bad luck in China. You also need to learn about business etiquette in that foreign country so as not to offend your prospective partners. 

Leaving everything in the care of others

You opted for a market, you gathered a local team and then you just got interested in another prospect and left this one in the hands of other people. Although your team will not trick you and steal your money, without clear instructions, they might make what they think is best and for that not to turn out to be the best option, because they might lack some knowledge about your budget, intentions, business, etc. 

This is why you need to be there throughout the entire process, from the investment fazes to whatever you decided to do with the property. If you wish to rent it, be there for your team, at least online, so you can make sure you’ve found the right tenants, commercial or residential, and that you are on the same page when it comes to the rent. Your primary job and potential time difference can make this collaboration a bit complicated but it is more than necessary to ensure a successful investment.

Now that you know what to pay attention to, gather your courage, and step up into the brand new world of opportunities.