Investment houses overseas

The opportunity

With House Buyers USA, buying investment houses overseas has never been easier and lower airfares have made travel more accessible. The opportunity to buy more cheaply than in the domestic market is enticing more people to extend the concept of holiday homes and investment houses overseas.

For those interested in investment houses overseas, there are opportunities for higher yields and increased diversification. Furthermore, diversifying your investment property portfolio by buying property in several different countries can help to cushion you against downturns in any one particular market.

International property investing

In the opposite corner to these theoretical attractions of international property investing, however, are some unique challenges, such as a lack of information on the local market, identifying and managing overseas properties, or cultural, legal and tax hurdles.

An important consideration, and one not to be overlooked, is the exchange rate on currency transfers, since fluctuating exchange rates will impact the amount of money you spend. Both the purchase cost and the proceeds of the sale of foreign property is affected by the exchange rate at the time. If you buy when the exchange rate is favourable, then you are more likely to have purchased well. However, if when you sell the property the rate is unfavourable you could lose a high percentage of any capital gain. This effect may also be felt on any income from your investment houses overseas year to year as well.

International property investing

Experts warn that property investors who do venture offshore need to be aware of the markets they are getting into, as every country has its own laws governing the buying and selling of properties, the obligations of landlords, different tax regimes etc. Also, if you do not take the proper precautions, consumers who buy investment houses overseas may have no protection under Australian law if something goes wrong.

Those issues aside, let us look at where that next home will be located, and why. Your purchase may be purely practical, because you are going to be living and working in the country for a while. On the other hand, it may be an investment decision, or purely a whimsical notion that you have always wanted to live overseas.