If an opportunity to invest in overseas properties comes along, it is best not to jump into it immediately. Diversifying and expanding your real estate investment portfolio globally comes with a set of challenges and there are some key considerations when investing globally.
The location (country) is one of the determining factors to consider when investing in overseas properties. Although investing in properties in developed countries possess lesser risk as compared to emerging or frontier countries, the rate of return may potentially be lower as well. Frontier markets are risky but typically with strong GDP, untapped resources and democracy. These factors make it attractive for investors to put their money in.
When considering overseas properties, an in-depth research of the country you are intending to invest in is essential. Some factors to consider include the economic, political and social situation of the country. Invest in properties in countries that have steady GDP growth, booming population and political stability.
You need to have a good understanding of how the currency of a country fluctuate before investing in foreign properties. If your home currency is strong against the currency of the country you wish to invest in, the cost of investment is substantially reduced. Likewise, the return on investment will be lowered if the currency of the country depreciates. Therefore, you should invest in a country with stable currency with little or no fluctuation.
Seek a reputable developer or management company
An in-depth research on the country you wish to invest in takes time and effort. Sometimes, it is better to leave it to the “experts”. Seeking reputable real estate developers or management companies lessen the risk of falling victim to investment scams.
As with any other investments, the best and well-thought real estate investment plans may fail due to unforeseen circumstances. Thus, it is vital to have a contingency plan and exit strategy to mitigate the risk of financial loss.
The Bottom Line
Sailing into relatively new and uncharted investment territories may be daunting. However, you can diversify and build a successful global real estate investment portfolio with proper research, professional intervention, a thorough investment plan and contingency strategy.
All information in this article is correct to the best of our knowledge and belief at the time at which the article was originally published.
This article was written in the author’s personal capacity. Any opinion expressed in this article are the author’s own and
do not reflect the view of Vivaz Capital Pte Ltd.
Vivaz Capital, a subsidiary of Vivaz Group Holdings Pte Ltd, is a private marketing and consultancy firm, headquartered in Singapore.
We market and bridge opportunities across Asia.