You’ll rarely know a foreign market the way a resident does. You don’t need to. You need a way to reach a decision you could defend to a sceptical friend, a lender or your future self, without pretending to local knowledge you don’t have.
Most cross-border mistakes don’t happen in the spreadsheet. They happen earlier, in the impression: a good week in a beautiful city, a headline yield, a confident introduction. Distance makes this worse, because the less you see day to day, the more weight one strong impression carries. The fix is to replace the impression with structure.
Step 1 · Write down the decision, not the destination
Start with the decision you are actually facing, not «Is Lisbon (or Dubai, or Valencia) a good market?». For example: «Should I commit X to a long-let one-bed in this district, held for about seven years?» A market is only «good» or «bad» relative to a specific asset, strategy, holding period and investor. Write the decision in one sentence before you read anything.
Step 2 · Read the market across four dimensions
A useful way to organise what you don’t know is to split it into four dimensions. Each one answers a different question.
1. Regulatory: what are you allowed to do, and can it change?
– How is ownership held and transferred? Can a non-resident buy freely?
– What rules govern letting: tenancy protections, short-let licensing, rent controls?
– What do planning and permits allow nearby (supply you will compete with)?
– How stable has the rulebook been, and who can change it?
2. Financial: what does the money really look like after everything?
– What are the transaction costs and taxes on entry, holding and exit? (Verify with a local tax adviser. This page is not tax advice.)
– In which currency are you earning, borrowing and spending?
– Is local financing available to you, and on what terms?
– What return is left after costs, vacancy and currency, rather than the headline yield?
3. Operational: who makes it work day to day, and at what cost?
– Who manages the asset, collects the rent and handles repairs, and what are their incentives?
– How long do vacancies, works and evictions realistically take?
– What happens when something goes wrong and you are 2,000 km away?
4. Informational: how good is what you know, and who told you?
– Is there public transaction or registry data, or only asking prices?
– Are rental and price figures independent or supplied by someone selling?
– What would a local professional with no stake in your deal tell you?
– What can’t you verify at all?
The fourth dimension is the one most people skip, and it changes how much weight the other three deserve. A strong regulatory and financial picture built on weak information is still weak.
Step 3 · Build a local proxy, not a local feeling
You can’t acquire a resident’s intuition on a schedule, but you can assemble a proxy for it: registry or transaction data where it exists, independent rental and price indices, planning and permit records, and a small circle of on-the-ground professionals (a lawyer, a valuer, a property manager) whose incentives you understand. The aim is not to know everything a resident knows. It is to know the things that would change your decision.
Step 4 · Look for red flags, then score
Some red flags are worth naming in advance, so you notice them when you are excited:
– Every source of information is connected to the seller.
– The yield is quoted before costs, taxes and currency.
– Nobody can describe the exit: who would buy this from you, and how fast.
– Rules on letting or ownership have changed recently and could change again.
– You would struggle to explain the deal in one plain sentence.
Then give each dimension a simple score (for example clear / uncertain / red flag). Agree a veto rule with yourself before you score: for instance, «a red flag in regulatory or informational means no, however good the numbers look».
Step 5 · Decide: go, not yet, or no
Reading a market is only useful if it ends in a decision. Three outcomes are legitimate:
– Go: you can defend the decision on all four dimensions.
– Not yet: a specific gap is fixable (a document, an independent valuation, a tax opinion). Name it and who will close it.
– No: a veto was triggered. That counts as a result too.
Size the commitment to how much you could actually verify. When the evidence is thinner than you’d like, which across borders it usually is, lean on the method rather than the anecdote.
Frequently asked questions
Do I need to visit the market?
A visit helps you check the operational and informational dimensions, such as condition, location and the people involved. It does not replace the structure. A single good visit is exactly the strong impression this method is meant to test.
Is this advice on any particular country?
No. It is a general educational framework. For any specific market, take local legal, tax and valuation advice.
Where can I learn the full method?
Level 2 · Reading a market works through the four dimensions in five modules, with a one-page 4-Dimension Market Map and a decision-scenario assessment.
Turn this checklist into a method. Level 2 · Reading a market is a self-paced course (~2 h, €120) built around the 4-Dimension Market Map: the right questions per dimension, the red flags others ignore, and how to score a market and decide. It ends with a decision-scenario assessment, and on a pass (70%) you receive a certificate of completion (non-accredited).
Starting from scratch? The Level 1+2 Bundle (€150) adds Level 1 · Foundations of the decision, with two separate certificates, one per course.
Related reading: Reading a market you don’t live in (essay).
José Covas Academy is not affiliated with or endorsed by RICS or IVSC. Certificates of completion are non-accredited.