Most people realize that real estate is the single biggest investment they are likely to make in their lives. For folks thinking of purchasing a property abroad, this can be a terrific investment opportunity, provided things are done correctly. For starters, not every seemingly attractive real estate opportunity is worthy of consideration. Multiple factors need to be taken into account, including the economic stability of the country, the political system, the cost of living, et al.
These are but a few of the many factors that must be weighed up before taking hard-earned money and investing it abroad. Believe it or not, investment in foreign property can have significant profit potential. Many investors have been known to generate a substantial net worth by carefully picking their real estate investments abroad. Unlike e-commerce which is limitless in possibilities, land is limited. It is a finite resource that is never going to increase. With a burgeoning population, demand for land has only one way to go. Tremendous value stands to be gained from investing in emerging market economies like Brazil, Russia, India, China, and South Africa – the BRICS countries.
Consider Investments in BRICS Countries
As a case in point, consider the tremendous returns that are possible with a small down payment on a condominium in Brazil. Investors routinely generate returns in the region of 50% – 70% over relatively short periods of time. And all of this is possible with a 20% down payment. It comes as no surprise that in an inflationary climate, real estate tends to hold its value and appreciate over time. The same cannot be said of money in the bank, cash under the mattress, or other traditional safe-haven assets like gold, silver, zinc and the like.
True, property bubbles occur from time to time, but the asset remains regardless of the price fluctuations. Unlike stocks which can be wiped out overnight, a home remains grounded in rock solid foundations. In time, most real estate investments will eventually appreciate and revert to the mean in terms of value. Outside of first world countries like the US or Canada, there are many lucrative investment opportunities for people seeking such options.
Real Estate Remains a Viable Option for Many Investors
Contrary to popular opinion, most Brazilians are now in the middle class. A burgeoning credit market has opened and clients – domestic and international – have access to lines of credit for mortgages. Rising demand in emerging markets has fueled a rush of foreign investors to purchase property abroad. Sometimes these markets are not as stable as they appear on the surface. Brazil has been rocked by malfeasance and scandal at the highest level, and currency instability is indeed a source of concern.
However, for foreigners coming with USD, GBP, EUR, or JPY, this is a godsend. If you’re thinking of plowing money into an emerging market economy, be sure that the capital is geared at high value transactions. Real estate is certainly a viable option when you’re looking to diversify your portfolio and generate tremendous returns. Always be sure to use professional money transfer services when you’re conducting foreign real estate transactions. There are many swindlers out there, pretending to be land owners with title deeds to properties that you want to purchase. Everything should be done through a solicitor, or a licensed company.
What Are Some of the Benefits of Purchasing Real Estate Abroad?
For starters, land can be used for multiple purposes. It can be used for tourism purposes, business purposes, or for agricultural usage. It is no surprise that more people in Brazil, Colombia, Ecuador, China, Russia, and South Africa are moving into the middle class and consuming more high-value foods such as beef, lamb, pork and the like. Land that is purchased for these purposes is certainly valuable. Perhaps the most beneficial reason people purchase land abroad is cash flow in an alternative currency. This is known as portfolio diversification, and it warrants careful consideration.
You should always evaluate your appetite for risk when diversifying your portfolio into real estate holdings abroad. Sometimes, this proves to be the best option given your unique circumstances. We have already alluded to real estate being a hedge against inflation, and it is certainly better than investing in a foreign country’s currency. Land is a finite resource, and provided you purchase appropriately (location, location, location), you can turn a handsome profit.