Have you ever considered investing internationally?
There may be more benefits than you knew.
London-based property agent, Experience Invest has provided 5 top tips for investing in property overseas.
1. Own a place in the sun
If we are totally honest, everyone has a dream holiday home in mind. Whether it’s owning a luxury villa or quaint beach hut in the sunshine, a ski retreat in France or even a city centre apartment in a location of your choice, owning an asset overseas is an aspiration for many.
Many opt for overseas property investments as it can be a more cost effective way of owning a second home. A strong local currency could stack up well in a foreign market, providing the buyer with more scope to indulge when purchasing.
From an investment angle, an overseas market could provide a better return on investment however, investors should conduct thorough research before buying.
Ensure that you understand the full extent of the land ownership laws in your chosen market and appoint a legal representative who can conduct research on your behalf. Investors should also consider the tax implications on any income which is earned overseas.
2. Expand your property investment portfolio
It’s important to not take an ‘eggs in one basket’ approach when investing. Owning a property overseas could be the first step to diversifying your investment portfolio.
Having a property portfolio which is limited to one country essentially means that you are at the mercy of just one economy.
Investing overseas can help spread risk and ensure that your property portfolio is flexible however, this strategy has no guarantees.
As Ben Graham once said, “The individual investor should act consistently as an investor and not as a spectator.”
In other words, if you decide to invest overseas, ensure you keep a close eye on what’s going on in that market as well.
3. Generate a passive income
Buy-to-let property is a popular choice for many people who wish to generate a passive income.
On a grand scale, a regular passive income can provide investors with the freedom to follow their dreams and live off earning which they generate from their property portfolio.
On a lower scale, a passive income from property can help pay off a mortgage, it can be used as a way to invest in future property and much more.
Either way, having another income stream from an overseas property investment isn’t a bad thing. Even if there are fluctuations in property prices, a regular income from the property will mean that the asset is still a safe option.
4. Own a tangible asset
Investing in a property is considered more stable other options as it is essentially a tangible asset.
The popularity of the asset class has increased as more people are investing in property instead of stocks and shares, mutual funds, unit trust and private pensions.
For example, if a company you have shares in goes bust, you will likely be left with nothing to show from your investment.
On the other hand, even if property prices crash, you are still left with an actual piece of real estate that has the potential to go up in price and can generate rental returns.
Long-term capital value can be achieved from property and, because it is a physical asset, you could improve the value of it by extending it or making improvements to it over the years.
5. Retirement option
Whether you are considering moving abroad to enjoy your retirement or you wish to sell up and reap the rewards of rising property prices, investing in an overseas property could be your ticket for a better lifestyle in your later years.
Depending on where the property is located, you could benefit from a lower cost of living in your later years if you decided to relocate.
No one can predict the future however, if property price rises continue, you could find yourself selling your overseas property for a considerable profit.
If you appoint a well-established property management company, you could let your property out and receive a regular passive income until you are ready to sell up. This could prove to be a successful choice for those looking to generate a nest egg for their retirement.
As Warren Buffett, the world’s most successful investor once said, “Someone is sitting in the shade today because someone planted a tree a long time ago.”
This article has been provided by Experience Invest; a leading UK property company based in central London.
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