Investing in Property Abroad

Real estate investment is not for the faint-hearted. Many of us can probably remember a time when this wasn’t considered to be the case – it used to be said that property was the safest investment there was – but in the modern age, it’s not so clear anymore. And it will therefore seem peculiar to some that people would recommend investing in real estate overseas – but the truth is that it offers a lot of opportunities you may not see domestically.

This information comes with all of the usual caveats – there is no investment that is guaranteed to pay off, value can go down as well as up. With that taken into account, though, there is a lot to be said for looking beyond this nation’s borders when it comes to investment. And as you’ll see below, playing your cards smartly will vastly increase your chances of a positive outcome.

Really get to know the country you’re investing in

It’s common to hear that one country or another is a “real growth market”, and there tend to be numbers to back that assertation. Numbers look really good in isolation, but if you want to successfully invest in property overseas, it’s a good idea to know about the places where you’re investing. You may read that real estate in a certain country is rising faster than anywhere else at a specific time, but there’s more to know than that. Is the rise happening specifically in one place, like a capital city or a coastal resort? Is it happening on the heels of an historic dip, and just reverting to the mean? You’ll need to know things like this before investing.

Don’t just buy somewhere you like

If you’ve recently visited a country or city on holiday and had the best time of your life, your dreams of investing in property can become clouded with personal preference. The idea of buying a holiday home which you rent out for most of the year – and hopefully spend some time in yourself – is attractive, but often you’re seeing the country at its best, which isn’t great news for growth. Many people take out hard money loans for overseas property investment, so it’s not money they can easily wave goodbye to. Your investment instinct needs to be founded in study of the markets, not based on how you feel about the country itself.

Don’t imagine that you can “set and forget” an investment

Unless you’re one of many investors in a larger syndicate, you’re going to have a significant responsibility for the place you buy. If you want to know how things might go for you should you seek to treat the property as an ATM, just google the phrase “absentee landlord”. Suffice it to say, your investment is unlikely to hold its value, and you won’t find a great deal of sympathy in the local community. Don’t invest in a place unless you’re willing to visit in person on a regular basis, and ideally employ someone in the local area to act as caretaker for the times when you’re not there.

Have an endgame in mind

Your overseas investment will gain in value, if you’ve invested wisely. If you want to make a profit – or keep making a profit, if you’re renting it out – you’ll need to keep an eye on that value. Ideally, you should have a plan for what to do with the place you’ve bought. That plan should include knowing when to exit the investment. If the value hits a historic high, you should be prepared to sell at a certain point. At that point, you can invest in another growth market. Or, potentially, you could move to live in the property yourself, selling up your current home and enjoying the financial gain along with a new life in a new country.

The key point is that investing in emerging markets needs to come with a plan for what you do when that market has emerged. Without that, you can end up losing all that you gained.

Investing in overseas property is an enthralling pursuit, and potentially very lucrative, if you know what you are doing and enjoy following international trends. But as with all other forms of investment, it needs to be done with a degree of hard-headed understanding of the market realities. It’s best if you can come to know and love the place you’re planning to invest, because those are the type of investments that can keep you in profit and underpin a long-term career.