Real estate investment is not without its risks and perils, just as any other type of investment. If there were no risks, you’d probably see no profits. And in some markets, the risks can certainly outweigh the potential financial benefits of making an investment in real estate.
But if you research the foreign market diligently and look for the key signs of stability and sustainability, the foreign real estate can be one of the best investments you can ever make. Owning a piece of real estate in a foreign country can be rewarding financially and personally.
Going Where the Opportunities Are
If you’re already a real estate investor, going foreign allows you to take advantage of booming markets when the market in your home country isn’t doing that well or offering great returns. The developing part of the world is a great example. With a growing middle class and more economic opportunities for their residents, countries like Thailand are becoming increasingly interesting to foreign real estate investors.
The new realities are making it easier to place your capital on the market. “Historically, foreign ownership restrictions and the availability of local funding meant there were limited foreign investments in the Thai property market,” says Richard Lusted, CEO of Siam Real Estate. “But tighter lending conditions and increased development costs due to rising land prices have forced Thai developers to look to overseas investors for funding.” And Thailand is not the only country that’s experiencing that kind of change.
Diversifying Your Portfolio
Portfolio diversification is something every investor should be interested in. The benefits of diversification are felt whether you’re investing in property, the stock market, or your retirement plans. The more spread out your investments are, the less risk you will have of losing everything in a sudden crash of the market.
The foreign real estate can be an important lifeline for you if your plans and investments at home go south due to issues with the market. Some countries are not too prone to develop real estate bubbles. Investing your money there can be your ticket out of a tough spot when the real estate bubble in your home country bursts.
Moving Your Money Away from the Prying Eyes at Home
When you spend money investing in a foreign real estate property, you are effectively sending your money offshore. That means that, usually, your property and your money there will not be under the immediate reach of your home country. Granted, it will be under the immediate reach of the local government, but that doesn’t have to be a problem if you’ve made a good choice of location for your investment.
You might also be able to get some tax deductions at home for some of the expenses of buying real estate abroad. And, if you hold the property in your name, and not in any form of trust or company, you might not even need to report it. And you shouldn’t also forget the fact that any turbulence with your domestic currency won’t affect the money you make off your foreign real estate investment.
The Fun of Foreign Real Estate Investing
Finally, you should also know that investing in real estate abroad can be very fun and rewarding. At the very least, you get to travel to a new country every time you plan to make an investment. You’ll meet different people there, experience new cultures, new cuisines, and whole new ways of life.
Depending on how you invest, your real estate abroad can serve you as a home away from home, a place for a quick getaway, somewhere you can raise your children or a place where you can retire. Owning real estate abroad gives you the chance for plenty of new experiences, and it opens you up to some interesting life choices.