INVESTING IN OVERSEAS REAL ESTATE – WHAT YOU NEED TO KNOW
Property investors from all over the world are being increasingly bold in their pursuit of real estate dreams and are no longer bound by territory. Property investors have become a force to be reckoned with when it comes to investing in overseas properties and the availability of financing facilities from banks for buyers that are planning to invest in overseas properties are expected to lure more property investors to consider investing in foreign countries.
Investors must be adequately informed and have a clear investment strategy in order to make successful ventures and to tap the vast spectrum of opportunities available within the foreign real estate market or else might risk being trapped in fraudulent deals.
Following are the outline of the benefits and necessary tips for investors to consider before embarking in the exciting domain of overseas real estate market.
- Offers excellent diversification of assets
Investment in International real estate offers portfolio diversification through low correlation with the domestic real estate market which enables the investors to take advantage by reaping returns from their overseas real estate investment even if the domestic real estate is facing a slowdown.
- Returns enhanced through currency exchange
Investing in properties of countries with appreciating currencies will enhance the profit margin of the investors through cash flow of rental returns.
- Offers long term growth prospect
Investment in real estate provides hedge against inflation and as such investors investing in foreign properties will benefit from the appreciation of the property’s value in a longer run while at the same time will be able to enjoy the property as a personal retreat or vacation gateway.
- Do ample research and evaluation before zeroing on a foreign property
Visit property exhibitions and the property itself to make a sound investment as it gives opportunity to potential investors to judge the property on factors affecting the value such as the neighbourhood and accessibility to public transportation while minimising the risk of being deceived into entering a fraudulent transactions.
This ensures that the property meets all the requirements and purposes of the investment.
- Advisable to attain assistance from a reliable consultants
The laws and regulations pertaining to foreign investing may differ according to country, thus it is advisable to seek assistance from professionals such as lawyers and real estate agents that are familiar with the laws and procedures involved in real estate transactions.
It is pertinent to ensure all the legal requirements are fulfilled as per the particular country’s property law in order to avoid any legal disputes in the future that might affect the returns from the investment.
- Currency Exchange Risk
One of the vital factors that potential investors should look into before considering buying a foreign property is the risk associated with currency exchange.
Investor must identify the volatility of the foreign currency of the country that is being considered for investment against the domestic currency of the investor as the investor may risk losing the value of his/her investment should the value of the foreign currency erode regularly from the day of the property purchase.
Drastic fall in the value of the foreign currency will affect the investment returns even if the property appreciated in value due to the greater fluctuations in the currency value.