Investor Demographics on Property Abroad
The demographic of the prospective property investor abroad has two stark contrasts. You either have the substantially wealthy individual who is looking to retire somewhere such as the French Riviera or you have the modestly wealthy entrepreneur who is hoping to end up owning multiple residences in several different countries. This buyer is looking to mortgage and then end up renting the real estate via Booking.com or Airbnb.com. Both of these respective buyers create a unique foreign investment climate that is spreading across the globe today.
Making The Decision To Invest in Property Abraod
Making the decision to invest abroad is largely based upon a comparison of your home market versus other competitive real estate markets abroad. The reason that this is so crucial is that many prospective investors invest in real estate abroad in order to protect their financial assets from being insecure in their home countries. A pivotal example of this can be seen from the case of Venezuela and many countries in Latin America. If the home governments have the right to take bank accounts and property titles without due process while simultaneously implementing exchange controls on currency, many wealthy individuals invest in foreign real estate to protect their assets and to have a nice vacation home.
An example of investors considering taking their prospective investment projects elsewhere can also be seen from the United States. The reason for this is that since the housing crash in 2008, Americans have lost a great deal on their expected return on their housing investments. This is combination with the high cost of real estate and taxation in the United States causes investors to consider leaving the country to invest in projects that require less capital and taxation. Additionally, many of these Americans end up retiring abroad as well or starting viable expatriate projects with their real estate investment.
When expatriates are considering investing abroad, it is important that they know what to look for when analyzing which prospective market would be best for their particular needs. The ultimate real estate market to invest in is a market where there will always be an enormous amount of demand in comparison to the amount of supply available. This is the key to finding the ideal market. Once this threshold is met, it is wise to choose prospective markets that meet your interests. For example, consider whether you want to be near the ocean, in a large city or in a specific desired climate. After making that assessment, it is wise to conduct four different calculations in order to verify that your prospective locale is a worthwhile investment. These four calculation methods include: below market value, capital growth, return on investment, and profitability.
Once these calculations are made, there are additional options to be considered.
For example, it is wise to consult with a financial planner and a tax advisor. The reason for this is that taxation is a major avenue to consider when planning on investing abroad. Additionally, it is imperative to consult with a property management company and an independent legal advisor to ensure that your prospective purchasing agreement is sound. That being said, one of the most important professionals to consult is a currency transfer specialist. One of the most common ways to overpay on an overseas investment is pertaining to currency exchange. When making a purchase of that size, currency makes an enormous difference on the purchase price and finding the right company who will give you honest pricing is crucial.
Tip of the day for overseas property investors: Don’t forget international money transfers huge impact on your success
Success Stories on Overseas Property
One of the most impressive global success stories can be demonstrated by Chinese Billionaire Wang Jianlin’s success. Even though Wang Jianlin began his career in China buying 82 luxury hotels, 213 cinemas, 99 department stores, and 54 karaoke centers, he made the majority of his fortune when he branched out his investments to foreign markets. To date, he has invested in real estate in Madrid, London, and India. Additionally, Jianlin has purchased Beverly Hill’s famous Wilshire Boulevard. Jianlin is an example of how making a great deal of money in domestic real estate can also lead to making even more money by bringing his investment prospects abroad.
The Global Property State of Affaris
In 2016, there has been a slight shift in popular cities to invest in foreign real estate. In fact, many of the popular places to invest are in the Western Hemisphere. To begin, two cities in Belize are making headlines for viable investment opportunities. For beach lovers, Ambergris Cayne, Belize, is an ideal place to invest. The reason for this is that one can acquire a beachfront two-bedroom apartment for $250,000 and a one-bedroom beachfront apartment for 100,000. Belize is appealing to many English speaking expatriates given that there is a great deal of English spoken in Belize. Additionally, Belize has a consistent demand for real estate due to its natural beauties that attract prospective investors annually. This means that Belize will always have a consistent demand for prospective investors, which will keep property values consistent.
Another surprising locale that is ideal for real estate investment is Samaná Peninsula in the Dominican Republic. The Dominican Republic offers a two-bedroom apartment for $200,000. What makes the Dominican Republic a great investment is the cost of living there. The basic necessities such as food, medicine, and transportation are quite affordable. There has been a great increase in expatriates who want to retire in the Dominican Republic due to the sensational beaches and affordable cost of living. There will be a consistent source of demand for the supply of real estate in the Dominican Republic given that expatriates can live on less money there and still have a high quality of life.
Italy also makes the cut as one of the top places to invest in expatriate real estate. Abruzzo, Italy offers a particularly good investment. For example, an expatriate who wants to purchase a home for $45,000 can do so with minimal repairs and renovations. Italy is appealing to expatriates in that it has the security of being a member of the European Union and the assurance that there is an abundance of demand given that so many expatriates love Italy and want to buy real estate there.
The last locale that appears on this list is Istanbul. Istanbul is a fascinating city for the investor to pursue because it has historically linked the Middle East and the West. If an expatriate invests $50,000 they can acquire a one-bedroom apartment to use for Airbnb or as a place to stop over while traveling around Europe, Africa, and the Middle East. Turkey has low taxes and their currency is a lower value than more stable currencies in the world making the prospect of investing there ideal for the expatriate who has a more entrepreneurial interest in their investment.
Investing in property internationally is a sensational idea to grow your overall net worth. The key is to acquire capital for your first investment and to be intelligent about what the realistic returns are on your prospective investment. If you have entrepreneurial desires, it is wise to use the first property as a business to buy the second property and grow your real estate empire from there. With sites such as Airbnb and Booking.com, one can make an incredible investment in this way. For the expatriate who wants to retire in peace, this is a great way to find an affordable home that still retains value. Thus, consider where you want to be or where you want to start your business and use this as a culturally stimulating way to make money or lay down your hat and retire.