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What The Global Property Investor Should Own Now

July 16, 2010, Paris, France: A diversified international real estate investment portfolio includes rental investments, raw land, early-in beachfront development lots, and direct-developer investments.

Dear Live and Invest Overseas Reader, 

The perfectly diversified international real estate investment portfolio might look something like this:

  • rental property in Europe that is leveraged (that is, carries a mortgage...remember that it's possible to borrow for the purchase of real estate as a foreign buyer in many European countries) and that generates positive cash flow. Right now France, Italy, and Portugal make the most sense for this kind of investment. This is a long-haul play, and, thinking very long term, I like Paris.

  • In Paris this month, I'm reminded that this is the closest thing to a recession-proof rental market as you'll find. France is perennially the world's most touristed destination. This season, thanks to the Greenback's strength against the euro, tourism in is way up throughout the country and especially in Paris. The rues of this city are crowded with camera-toting, guidebook-carrying visitors, many of whom choose short-term rental apartments over hotel accommodation. Our rental manager assures us that, right now, short-term rentals are in greater demand in the French capital than they've been in some time. 

    All markets cycle, including the Paris rental market. But, again, this city is as close to a sure-bet for this kind of investment as exists.

  • Next, a rental property in a resort location. Right now, I like the Philippines for this.

  • Then, a rental property in another active market. My top recommendations today would be Panama City and Buenos Aires. Neither is as recession-proof as Paris, certainly, but the Panama City rentals market continues to boom (I'm netting 12% per year from my downtown rental) and B.A. is a city that generally always attracts its share of visitors needing a place to lay their heads temporarily.

  • In addition, your well-diversified international real estate investment portfolio should also include early-in development lots. For this, right now, look to Panama, Belize, and Uruguay. I let you in recently on one of the best early-in lot opportunities I know of right now, in Belize

  • Then, raw land. For this, again, I like Panama. Frankly, if your property investment portfolio doesn't include some holding in Panama, you should look to fix that this year. This country's property markets (rentals in Panama City, development lots, and raw coastal land) offer both safe haven and serious upside.

    For raw land investments, I also like New Zealand and Honduras. 

  • Finally, if you can find an opportunity for one, I recommend including in your portfolio a direct investment with a developer. This could be a straight equity investment in a development or what's referred to as a "hard money loan."

    Equity is self-explanatory. A hard money loan is when you lend cash to a developer who needs some (don't they all?). Usually, your loan is collateralized by land, and you are promised a return of your capital plus some premium typically great enough to make the undertaking worthwhile from your point of view. A developer might offer you a return of 25%, for example, within a specified period of time, say, 12 months. 

    This portfolio would give you 6 to 15 properties in perhaps 4 or 5 countries. It'd bring you diversification of market, of currency, of type of holding, and of exit strategy. 

    And it represents all four strategies I recommend you employ: buying wholesale, path of progress, crisis investing, and real productive assets.

    Lief Simon

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    Continue Reading:
  • Beachfront Real Estate In Panama 
  • Retire To Gabian, France

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Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 25 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring, and investing overseas in her free e-letter.

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