In 2012, we bought an apartment in Medellín, Colombia. It was nearly 400 square meters in an architecturally interesting building in a prime location and featured a terrace with an expansive view over the Medellín valley and the mountains beyond. It was a one-of-a-kind find.

But it was not the property we'd set out to buy. Our attention had been piqued by reports of annual net rental yields in this market of as much as 20%. We planned a scouting trip and looked at a dozen apartments that could have worked well as straightforward cash-flowing rentals generating that level of return, but it was the oversized apartment in El Poblado that got our attention. It was not rental ready, but the price was irresistible. It allowed us to buy at one of the best addresses in a market we predicted was positioned for rapid and dramatic capital appreciation, in addition to those 20% annual net yields, for the extraordinarily bargain price of $675 per square meter.

In addition, while the straight-up rentals we viewed were each more or less the same as all the others, this was a property of charm and character. At least it had the potential to be charming. The apartment had been the home of a single 80-year-old woman, who had lived in it alone for decades. The kitchen, the bathrooms, the fixtures, and the fittings were all 1950s originals. The place needed a total overhaul, meaning that, instead of a turnkey rental investment, we ended up opting for a gut-job rehab.

To carry it out, we engaged a local contractor named Carlos. With Carlos's help, we conceived a plan to reconfigure and rebuild the space. The apartment had a galley kitchen intended to be the domain of household help. We wanted a big, open kitchen with room for cooking and hanging out as a family. We also wanted a library, a game room, and a bar on the terrace.

The more we got into the project, the more personal it became. We imagined parquet floors in the living room and library, handmade and hand-painted Spanish-colonial tiles in the bathrooms and kitchen, and French doors to the terraces. We let our imaginations run because we'd been assured that the costs of this level of construction and finishing would be low. Both labor and materials were a screaming bargain…everyone told us.

We began the renovation in July. Carlos said the work would take four months. By late December, the place was still a wreck. By this point, we were concerned not only about the timeline but also the costs. We'd spent the total original budget, but the “Send more money” requests from Carlos were filling up our in-boxes and the photos he was sending to show progress didn't. We planned an emergency trip to Medellín to see what was what. Walking through the apartment with Carlos, we calmed down a bit. The demolition and behind-the-walls work had been done, and the new floors had been laid. Still, though, we had no doors, no windows, no bathroom fixtures, no bookcase in the library, no terrace bar, and no kitchen.

Four months of short fuses and heated email exchanges later, we walked through the front door of our finally remade El Poblado pad to find the sun beaming through the windows of the French doors to the terrace and glistening off the polished parquet. It was everything we'd originally imagined it might be.

And, when the final accounting was done, the top-tier renovation had cost nearly twice what we'd budgeted but was still a per-square-meter bargain, given the end result.

We've renovated 13 properties in six countries. The first thing we've learned is that they all, like the Medellín project, take twice as long and cost twice as much as you plan. We've not yet taken the step of allowing for this by doubling our time and expense projections from the outset. We worry that, if we did, the inflated figures would still fall short of the ultimate actual figures by half.

The reason the Medellín project stands out in memory is because, after renovating so personally, we were reluctant to rent. We listed the apartment with one, a second, and then a third rental management agency, but it rented maybe a total of six times. Fit a place out with custom parquet, hand-painted tiles, a claw-foot tub, and antique chandeliers and you become discriminating about who you feel comfortable allowing to spend the night. We set the rental rates so high that we priced ourselves out of the market. Finally, we pulled the listing from the third agency and hired a property manager to take care of cleaning and paying the bills. It was no longer a cash-flowing asset but a straight-up expense.

You could call it a rental investment disaster story. On the other hand, the apartment is now worth four times what we paid for it. It generates no rental cash flow, but we use the property for family vacations at least once a year. Kathleen is happy with the situation; Lief less so. It's perhaps our best example of what we've come to refer to as “The Spousal Effect.” Lief's spreadsheet rental projections were out the window when Kathleen took charge of the project. What short-term tourist rental renovation budget includes custom cabinetry and leather Chesterfield sofas?

The third thing, therefore, that we've learned about undertaking a renovation project in a foreign country is that everyone involved must agree on the objective from the start. Is the completed property intended for rental or for personal use? Often the answer can be both, which is when things can get messy.

At some point during every renovation project we've taken on, we've sworn it's the last. Yet, even now, we'd tackle another under the right circumstances. First, a fixer-upper can be a bargain, allowing you to enter a property market at a low price and positioning you for potentially big capital appreciation upside in addition to, if you don't overdo or overdecorate, rental cash flow.

In addition, and for us more important, this is one of the best ways we've found to engage with the local community. In Ireland, France, Panama, Colombia, Argentina, and Portugal, the places where we've taken on renovation projects, the architects, contractors, woodworkers, painters, and landscape designers we've worked with have become personal friends and have been our entrée to the local scene, giving us insights into the local culture we wouldn't have had otherwise.

When we think back on the renovation of the nineteenth-century Georgian Lahardan House in Waterford, Ireland, we remember the little bent Irishman with the screwdriver in the back pocket of his tweed trousers who was the first to tell us the place we'd just bought was riddled with rising damp (though he walked away and out the door before we were able to ask him to explain what that meant). We see the Welshman Liam hoisting four or five sacks of cement at a go without noticing. We laugh about the gardener Ian who we finally realized was living in his car but who built beautiful stone walls. And we remind ourselves of John the cabinetmaker who worked around the clock for two weeks so we'd have a kitchen in time for our first Christmas.

It's possible to renovate a property in a country where you're not living. In fact, only one of our projects—Lahardan House in Ireland—was undertaken in the place we called home. All the others have been managed long distance. The three renovations of apartments in Buenos Aires, Argentina, were handled completely by an architect contact. We didn't see the apartments until a year after the work had been completed because they were rented on annual leases, but the architect sent pictures on a weekly basis to update us on the progress. Material selections and furniture choices were agreed via email. The process was seamless, but we wouldn't recommend it. Ideally, you should plan to visit the project at least monthly during the renovation process. At critical stages, you may need to be present weekly or daily. If you're not living where the property is located, add travel costs to your budget.

Based on more than two decades of experience, here are the 12 things we wish someone had told us before we undertook our first renovation overseas…

1: Location Is Still King

As with any real estate purchase, location is the number-one priority. It's the only attribute of the property that you can't change, and it's especially important with a restoration project, especially if you intend to rent the place. Renters will overlook a multitude of sins for a good location. With a city property, for example, walkability should be a priority. You want a location that's nearby to restaurants, cafes, grocery shopping, and home supplies. Both potential resale buyers and renters will appreciate the convenience and the ability to stay in the property without having to invest in a car.

2: Identify Your Potential Resale Buyer or Renter

As when investing in any property for rental, do your best to imagine who your renter might be from the start, before beginning the restoration work. If your renter will likely be a traveling executive, you'll make different choices than if you think you might be renting to families with children. The differences have implications for both the work you do and the location you pick.

3: Check the Structural Basics

Verify that the house is structurally sound where it counts. Problems with the foundation or structural members or termite-damaged framing can be too expensive to make right. The perfect fixer-upper has a solid structure but horrible curb appeal—an overgrown yard, peeling paint, and broken windows, for example. These are nickel and dime items that, when addressed, change the eventual value dramatically.

4: Set Your Target Budget in Keeping with the Surrounding Market

Before making a purchase, be sure that values in the neighborhood where you're considering buying are in line with what you imagine for your restoration project in its finished condition. Say you want to buy a house for $50,000, invest another $50,000, then ultimately resell the property for $150,000 (a reasonable expectation for profit margin). Before committing to the purchase, make sure other homes in the neighborhood are selling in that price range.

When making an offer on a fixer-upper that you intend to resell, start by estimating the price you'll eventually ask for the finished product at resale time. Then estimate the restoration costs (with help from local contractors if necessary). Add the total restoration costs to the purchase price to confirm that you're below the eventual asking price you imagine. A good rule of thumb is for your total investment (purchase price and renovation costs) to be at least 20% less than your imagined resale price. This means you could resell immediately upon completion of the renovation for a profit without having to wait for the market to appreciate if you decide you don't want to.

5: Spend on Items That Produce a Return

It's easy to overspend on non–value-adding items. A modern kitchen, granite or ceramic counters, painting, and updated bathrooms are worth the money. These are things that make a difference in photographs, which are key in attracting renters, and that usually add more value at resale time than you spend on them. On the other hand, custom bookcases, high-end cabinetry, specialty hardware, and even a swimming pool—while nice upgrades—are expenditures that may not make sense depending on who you're planning to target for rental. A beautiful gourmet kitchen can be worthwhile in a rental property in an upscale neighborhood of Panama City, Panama, but not in a town like Loja, Ecuador, where everyone has a maid who does the cooking. Inevitably, you'll invest in some little luxuries along these lines, things that matter to you and that will make the place comfortable for your use. But keep track of these indulgences to be sure they don't erode your eventual return too dramatically.

6: As Much as Possible, Go Local for Materials and Methods

In the United States and Canada, wood is cheap and plentiful. This is true in some other countries, as well (Belize, for example), but not all. In most of Latin America, lumber is expensive and rarely used as a bulk building material. To keep costs down (and also to ensure a solid home), plan on using masonry. Save the wood for trim. Local craftsmen in Ecuador, for example, build kitchen cabinets out of brick and ceramic tile then finish with wooden doors.

Try not to be too directive until you're familiar with how things are done locally. Each renovation project is a chance to learn new methods for construction. Fieldstone driveways, adobe and rammed-earth construction, and homemade clay tile roofs aren't typical in the United States, but they're the norm in many other countries, meaning these can be the most affordable options as well as the techniques local craftsmen are most familiar with.

7: Be There While the Work Is Going On

Even going out for lunch can be risky.

The difference between your standards and expectations and those of your contractor and workmen can be so vast as to defy explanation. You need to be prepared for this gap. It doesn't mean the workmen you've hired are bad at what they do; it means they do things differently.

As much as possible, be onsite when work is going on. If you can't be physically present yourself, you need to engage a trusted associate who knows your standards for quality, ideally another expat. If you hand a project over to a local craftsman or contractor, you're sure to find unwelcome surprises when you return.

8: Have the Money Before You Start the Work

Be sure you have the time and money to complete the project, assuming it's going to take longer and cost more than you're projecting. It always does.

9: Vet the Contractor

Take the time to investigate his track record and reputation before committing. Your contract is only as good as the person with whom you enter into it. In addition, insist that your contractor present you with a detailed itemized bid based on the architectural plans that includes everything from window and door frames to iron railings and zinc-plated screws.

10: Invest in Plans

Don't skimp on the architectural plans. You get what you pay for. We worked with one of the most expensive in Panama to draft the design for the house we built on the coast of Panama. We could have saved a few thousand dollars at least by using someone else, but we've seen how wrong things can go when the plans aren't fully thought-through and painstakingly detailed. When working in a foreign country with workers of varying levels of experience and expertise, it's a risk to leave anything open to interpretation. The crew on the ground has no choice but to improvise. We promise you that their improv will not meet your expectations.

11: Consider the Geography

If you're building at the coast, remember the toll that sun and sea air take. For our house at the beach in Panama, we used local hardwoods for finish details and treated the wood with wax, knowing that we'd have to reapply the wax finish often. It will be a constant part of the maintenance of the property. We invested in oversized rain gutters because, during the rainy season in this part of this country, the rain falls in torrents, and we built in extra insulation beneath our red clay-tiled roof to help control air-conditioning costs.

12: Always Hold Back Partial Payment

Don't pay in full up front for anything. You know this. It's common sense. However, we've gotten into trouble when we've listened to workers' hard-luck stories. Pay something to get the work in question underway, something more at agreed-upon progress benchmarks, and the final amount after all punch list items have been addressed. Don't be tempted to compromise on that plan.