“It’s perfect. I’ll take it. How much is it?”
So said the Irish hairdresser to the Montenegrin real estate agent.
The agent was touring the young woman through an apartment for sale in the medieval town of Kotor. The woman didn’t get past the entryway before making her buy decision. Indeed, she had been ready to invest before boarding the plane from Dublin. She was desperate to take her first step onto the property ladder but didn’t qualify for financing at home in Ireland (the “do you have a pulse” mortgages didn’t become common in this country until a year later).
No bother. Everyone was buying property abroad. She would, too.
The agent who sold the hairdresser that Kotor apartment told me the story when Lief met him the following week. We, too, were considering an investment in Montenegro.
It was 2004 and that agent (like all real estate agents in the country) was selling properties faster than he could count the commissions. All Europe and a few Americans like us were competing with each other to get into the hottest new property market on the Continent. Unlike the hairdresser, we didn’t invest. The math didn’t work.
That young woman from Dublin, like too many novices and even many experienced investors, was buying because she was certain the value of what she was buying was going to increase. She didn’t bother to ask about the potential for rental yield or try to project the cash flow she could expect.
She (we assume and would have loved to have had a way to confirm), along with multitudes of other global property investors, learned the hard way and only four years later that, when investing in real estate, rising prices are not guaranteed. The 2008 crash wiped out values worldwide and, with them, investors who hadn’t run the numbers but had bought for appreciation rather than yield.
Property values move up and down and matter only if you’re selling the property. Cash flow can be reliable and is always bankable. Buying for appreciation is chasing paper profits. Buying for cash flow is putting money in your pocket.
When investing for cash flow overseas, you want to make buy decisions based on the cash flow math, but you also want to remember the big picture. This is an investment strategy, yes, but, more important, it’s a lifestyle.
So, before you begin considering where or what to buy, ask yourself what you want your life to look like. That’s the place to start. What life objectives are you hoping to achieve? For the best outcome, you want to marry those with your investment goals.
Fundamentally, the real advantage of this strategy is diversification, of your portfolio and assets but also of your life, your retirement, and your legacy.
We are living at a time that presents the opportunity to take the investor’s profit agenda, combine it with the live-better-for-less agenda of the retiree, and transfer it overseas. You have a chance right now to use overseas real estate as both an investment vehicle and a program for a new and better life, both immediately and longer term in retirement.
Overseas real estate amounts to the surest strategy for creating and
preserving legacy wealth
while simultaneously reinventing your life and rescuing your retirement.
Many options exist for where to buy to make money while also making a new life, and, thanks to our Age of the Internet, it is possible today to seize these opportunities easily and cost-effectively to build a new life while staying in real-time touch with family, friends, business concerns, and investment portfolios from the old one.
The best case is when you are able to find a piece of real estate in a place where you want to spend time, short term on vacation and long term in retirement, that also holds out the potential for cash flow and an investment return. This perfect storm of objectives should be your ultimate goal. A holiday home on the coast of Panama can become little more than a headache and a carrying cost if you ultimately decide you can’t abide life in the tropics.
The reasons to diversify your investment portfolio and your lifestyle to include cash-flowing real estate overseas have never been more compelling than they are right now. This is the ultimate strategy in the face of uncertainty, and we’re faced with no shortage of that in our world right now.
But, you may be thinking, who does this, really? Isn’t this a strategy of the jet-set? No, it’s not.
Lief comes from middle-class Phoenix, and I’m from middle-class Baltimore. We started our overseas real estate adventures with next-to-nothing. Lief made his first property investment using a US$5,000 gift from a family member.
Over the decades that we’ve been living this life we’ve met countless others who, likewise, have built adventure-filled lives that include cash flow-generating real estate holdings overseas, and we can’t think of one of them we’d describe as jet-set. These are all regular folks.
The idea of diversifying your investments, your assets, your life, and your future overseas can seem intimidating, even paralyzing. Could you really do it? Based on more than 25 years of experience, we can tell you confidently that the answer to that question is yes.
The two most common reasons for resisting the idea of investing in real estate overseas can be a general uncertainty about how to go about it and a more specific concern about the cost. Can the average investor or retiree really afford to pursue this strategy? Again, yes. You could get started with as little as US$40,000 of working capital, sometimes less.
How can you be sure something won’t go wrong? You can’t. There are risks, and, as with any kind of investing, nothing is guaranteed.
Don’t let that deter you.
What’s the option? To do nothing? To keep your assets, your retirement, and your future all at home, all in one place? Would that be safer or more prudent?
What do you think?
You must diversify, both your investments and your life. It’s a necessity of the world we’re living in. Here’s your chance to do that while creating healthy and steady cash flow to fund an adventure-filled lifestyle in retirement or starting right now.
How can you get started?
This week, I’m going to walk you through it…
Kathleen Peddicord
