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By Amelia Lopez
Investing opportunities are everywhere, and countless promise great returns. The most profitable investments among them are houses and apartment units for rent. Some of the most profitable are international tangible investments that can provide a more predictable cash flow than stock and cryptocurrency.
Below are some reasons to choose international real estate and a guild of expanding property investments.
Is real estate investing a good idea?
International real estate investment offers buyers several potential benefits, depending on market conditions. Below are a few reasons why investing in real estate can be a good decision:
- International real estate provides stable asset appreciation: The value of homes and apartments may increase over time, and while there are instances where prices may vary, it is still a steady long-term investment that may provide growth.
- International real estate provides a stable cash flow: One of the prime benefits of investing in real estate is its ability to generate a cash flow. In many cases, cash flow only strengthens over time as you pay down your mortgage and build up your equity.
- International real estate investing can hedge against inflation: Home and rental prices tend to rise and fall along with inflation. Making it a secure investment in case depression happens.
- International real estate can potentially diversify your investment portfolio: A diversified portfolio will help reduce volatility. Especially since home prices tend to fluctuate less than other asset classes, such as stocks.
Things to know about real estate practices around the world
Pros
1) Protection
One of the greatest pros to international real estate investment is that it helps to diversify your portfolio. By adding international real estate, you’ll be protected against market fluctuations. In many cases, foreign investments help to negate declines experienced in any market, thereby giving you more opportunity for growth.
2) Learn and investest
International real estate gives you the opportunity to expand your professional real estate network. This, in turn, will help to increase your overall knowledge of real estate investment and let you choose the best country to invest in.
By expanding your expertise, you gain a better understanding of real estate markets on both the local and international stages. As your confidence increases, you will have seemingly limitless investment opportunities available to you.
3) Technology makes it easier
Technology has made investing and maintaining profits in multiple countries much easier. Because of the Internet, we are able to research lucrative markets and obtain expert recommendations on the best methods and countries to invest in.
Social networking also lets us know the laws, advantages, and limitations foreign countries have, all while sitting in the comfort of our homes.
Technology also lets you work remotely and monitor your investments. Whether you use the internet to work directly with your tenants or hire a property manager from an overseas company to oversee the property’s day-to-day operations, all of this will be possible through your fingertips
Cons
1) Diverse Laws
Real estate practices vary around the world. Meaning real estate laws in your home country may not apply to foreign regions. This is why it’s crucial that you understand the local legal processes to avoid violating any laws or making costly errors. Some countries have restrictions in place regarding foreigners owning local property, with the buyer’s country of citizenship, residence, and financial situation also taken into consideration.
2) Managing from afar
Investing in foreign countries means you’d have to find ways to manage your investment from afar. Screening potential applicants, collecting rent, taking care of maintenance and upkeep, and otherwise managing your property is difficult if you live in another country. You have the option to hire someone to manage the property; however, a successful business requires its owner to do personal check-ins. Especially if you can’t afford to lose money and the workers aren’t someone you know.
3) Currency Exchange Risks
When investing overseas, one of the biggest risks to face is currency exchange risk. Changes in currency rates can be unpredictable and can have an impact on your overall earnings. This means that you could potentially lose investment value due to fluctuations in foreign exchange rates between the U.S. dollar and other currencies used around the world.
Conclusion
International real estate provides several benefits to those hoping for a long-term investment. It provides a stable side income that can become primary if done right. The use of foreign countries for real estate has its pros and cons, but with the right knowledge, you’d be able to increase your assets and make a long-term, inflation-proof investment.
