Ask ten different foreign international real estate investors what their reasons for investing are, and it’s likely they’ll come up with ten different answers. There are plenty of reasons to get involved in the global real estate sector: from owning a dream holiday home to building the sort of investment portfolio that goes the distance and supports you throughout your retirement. There are a whole host of positive reasons to get involved.
But what do the opportunities in this sector look like – and how can a discerning investor like you get a handle on them and choose the ones that are right for your needs? This article will explore what the international real estate sector looks like – and how you can make the most of the opportunities it offers as a newbie international investor.
Regional flexibility
There are a whole host of regions around the world which offer real estate opportunities. Take the commercial office space scene in Dubai: thousands of offices are available to rent at any one time, meaning demand is pretty much insatiable. Or if you’re a Brit looking to break into the European holiday home market, you might be more drawn to destinations like the South of France or Spain where access is relatively easy.
But before you get your heart set on a specific region, it’s worth thinking twice about what the exact impact of your international real estate decisions will be and how they fit with your goals. If you’ve got the space in your budget (and you’re happy on a psychological level to outsource some of the decision-making process), then choosing an investment opportunity on the other side of the world isn’t a bad idea given that you’d be far away.
Plenty of international investors have been able to build top international real estate portfolios. Fahad Alrajaan is just one of them, and his experience at the Kuwait Real Estate Investment Consortium reflects the fact that this is possible. But if you’re an active property investor based in the UK who likes to be involved in the micromanagement of the letting and resale processes, sticking to the South of France makes a lot more sense.
Chance of security
As is the case with all sorts of global markets, there are no guarantees in the world of property investment. Investing in property isn’t a guarantee of any kind of success, and there are plenty of examples of international real estate investors who have made the decision to invest in a foreign-based portfolio and ended up regretting it when the market in their investment destination has taken a downturn.
But the advantage of international real estate to many investors is that it does offer some degree of security. Generally speaking, the real estate market does tend to rise over time – and while it is never guaranteed, many investors who tie up their investment cash for 20 years or more can usually expect to see good returns. And if you’re lucky enough to be in a position to diversify your international property portfolio to the extent that you cover a range of different countries and economies, you’ll be able to enjoy the benefits of diversification and keep your exposure to each volatile market as low as possible.
Diversification
The other major reason for the shift towards buying up international property is that it provides a chance for diversification. That is the practice of spreading capital out over a range of different investment destinations, with the idea being that if one fails your whole investment won’t be wiped out. If you already have investments in equities, for example, investing in property makes a lot of sense as it means your exposure to any one market force is reduced. And by going international, you’ll be ensuring your exposure isn’t limited to just the British markets.
Crafting an investment portfolio in international real estate is something that many investors choose to do – and when you look at the reasons for doing so, it’s clear that the advantages are numerous. Not only does investing in international real estate mean that your opportunities for safe and secure investment are raised to some degree, it also means that you can select a region which best fits your goals – whether that’s commercial investment, holiday properties or something else. To sum up; investing in international property is a move that suits a lot of people – and could well also suit your personal aspirations.