How to Expand Your Real Estate Empire Abroad
There is no denying that the year 2020 has been extremely difficult for everyone. The pandemic caused an unprecedented economic disaster and a massive market crash. However, even in this trying time, when volatility is high across industries, real estate remains a good investment. Moreover, many housing markets are growing hotter by the day and offer great opportunities. That’s why right now, investing in real estate abroad has become more important than ever.
This way, you will not only reduce the risks by diversifying your portfolio. But you also have a chance to get some prime real estate for cheap.
Real Estate Investing: Domestic Vs. International
Being a real estate investor is a wise choice. It’s an established fact as property has always been used as a safe haven for investors during economic turmoil. However, you need to understand that there are still risks associated with this type of investment. In particular, there is a risk of focusing all your real estate empire within one country.
This year has proven the fallacy of this strategy by making property markets extremely volatile. This led to a sudden huge drop in prices in some places. Rent has also gone down and with so many people losing their jobs in layoffs, even the number of renters has dropped. And one shouldn’t forget that extremely severe hit that the hotel industry has taken.
Simply put, some investors experienced a painful reduction in their ROI. It’s yet impossible to tell if they will be able to recover.
That said, there are quite a few places where real estate prices and rents have gone up instead. There are also places where the situation has remained rather stable with a very positive outlook, pandemic notwithstanding.
Now, imagine how the current crisis hit an investor whose all assets are residing in Florida hotels, for example. But what if this same investor had a network of properties in Florida, Mexico, Malaysia, and Europe? Yes, there would still have been some losses. However, there would still be some revenue coming in from other places.
This is the main benefit of diversifying your property investment portfolio internationally.
Also, keep in mind that in some places, your ROI might be much higher due to higher demand, different price range, and better tax regulations.
Top 3 Real Estate Markets to Invest In Today
The UK (London)
The pandemic is not the only cause of volatility for the UK right now. Brexit is still affecting the country and overall Britain’s economic recovery has slowed down due to a new wave of restrictions. However, the UK housing market is booming. London, in particular, is one of the best investment areas for real estate in the world right now.
It seems that no matter the global economy, UK real estate remains one of the best possible investments. The deal will be even better if you use the best way to transfer money from USA to UK. This way, you’ll be able to save up to 8% of the total transfer amount. Also, you’ll be able to protect yourself from the GBP volatility. And the best thing is that the UK is, essentially, the base of operation for cheap money transfer platforms. The few of them that are available in America offer great terms and low rates for transfers to the UK.
Italy is one of the countries hit the hardest by the virus. The economy of the country will be recovering for years from this blow. That said, Italy remains a market where real estate will always be in demand. The moment lockdowns are lifted, tourists will flock back there again.
And right now, you have a chance to get prime real estate in Italy for cheap. Unlike with many other places, this crisis brought on a sharp fall in property prices in the country. Therefore, now you have one of the best chances to buy.
In the last five years real estate prices in Singapore have risen by over 50%. The pandemic hasn’t changed the market growth, so it’s still a good investment. But it’s definitely an option for cash-heavy investors because prices in Singapore have not gone down.
Economic growth prospects for the country are tremendous. Therefore, if you can afford it, go for this real estate as fast as you can.
How to Maximize Your Revenue from Investing in Real Estate Abroad
To make sure you are getting the best possible deal when investing in real estate abroad, you need to:
- Use a money transfer company to cut the cost of buying the property.
This is essential because a large transfer through your regular bank might cost up to, and sometimes over 7%! With a money transfer company like Moneycorp, OFX, Global Reach, Currencies Direct, or WorldFirst, this transfer can cost less than 1%. It will be cheaper for popular currency pairs, like USD/GBP. Also, these companies offer hedging tools to help protect you from foreign currency exchange rate volatility.
- Hire a legal representative to act on your behalf.
As a foreign investor, it’s imperative to hire a legal agent to manage the deal for you. This way you’ll be sure that everything is legal and correct. Also, the real estate is an industry full of conmen. It’s not uncommon for shade real estate agents to not only make corrupt documents but also markup foreigners by up to 40%. Therefore, focus on looking for an expert who is licensed and an has impeccable reputation for being trustworthy.
- Develop a sound investment strategy.
Buying property abroad doesn’t mean that you should drop your domestic investments. Instead, you need to develop a plan where each new purchase will complement your portfolio. Consider your equity investments and see what you can add to improve your ROI. Be sure to spread your portfolio in a way that will benefit you in the long term.
Bottom Line: Invest Abroad to Protect Your Future
Being a real estate investor makes you safer, but this isn’t a perfect defense from global economic volatility. In order to protect yourself, you can start spreading your investments abroad. Move both to countries where the market is growing in spite of the circumstances and where the crisis caused prices to drop. This way, you’ll get the best from every angle and will make your portfolio more stress-resistant overall.