Investing In International Real Estate

Why Buy Real Estate Overseas

A piece of real estate anywhere in the world is a real asset that you control and that, barring some act of God, can’t disappear altogether. (I knew a guy years ago whose beachfront lot on the shores of Montserrat was a volcano victim, but that kind of thing is rare.)

Further, buy right, and your property investment can grow in value and deliver reliable cash flow. Certainly, if you’ve bought right, with an eye to intrinsic value, your asset should hold its value. It can also be productive, growing things—teak trees, for example—that provide additional value of their own. Plus, real estate is an asset you can use. Depending what you buy, you could vacation to it, retire in it, or lend it out to your children and your friends. All things considered, as investors have understood for centuries, real estate is perhaps the soundest long-term investment strategies you can pursue.

The current opportunity, though, is bigger. In the current global financial climate, not real estate in general, but real estate overseas, specifically, is the smartest thing you can do with your capital, be it ear-marked for investment or retirement.

Bottom line, real estate overseas is the ultimate diversification strategy at a time when diversification beyond U.S. markets and outside the U.S. dollar is more important than ever before in our history and certainly more important than ever before in our lifetimes. No matter how many kinds of investments you hold, if they’re all U.S.-based or all U.S. dollar-denominated, you are not diversified. You are at the mercy of U.S. markets and events, and no investor wants to be that vulnerable.

Specifically, here are nine reasons why you are smart to be considering this idea right now:

Reason #1:

Like real estate anywhere, real estate overseas is a hard asset, and, in the current investment climate, hard assets are the most sensible investment class, the best choice for storing value long term…

Reason #2:

As with real estate anywhere, you’re buying with the hope of capital appreciation, but you can also be buying for cash flow, an important current investment agenda…

Reason #3:

Real estate overseas provides portfolio diversification—diversification of currency, diversification of market, and diversification of asset type (rental, raw land, productive land, condo-hotel, etc.)…

Reason #4:

Real estate overseas provides the opportunity for you to position yourself to profit from both expanding and crisis markets…

Reason #5:

Real estate overseas can double as a retirement plan—today’s investment can be tomorrow’s retirement residence…

Reason #6:

Real estate overseas can double as a holiday home, an investment that you and your family are able to use and enjoy from the day you make it…

Reason #7:

Real estate overseas can be part of a legacy of wealth that you leave to your heirs…

Reason #8:

Real estate overseas is safe and private, one of but two remaining asset types that an American need not report to the IRS every year…

Reason #9:

A real estate investment overseas can bring tax advantages, including deductions you can take on your U.S. tax return…

Reviewing this list of reasons to buy real estate overseas, you notice that, big picture, it breaks itself down into two categories—category 1: investment; category 2: lifestyle. Very different agendas that, for the best results, should be considered in unison.

Another thing to notice about this list of reasons to put your time and money into the acquisition of real estate overseas is that, fundamentally, as I’ve explained, it’s all about diversification—diversification of your portfolio and your assets, but diversification, too, 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. An opportunity to use overseas real estate as both an investment vehicle and a strategy 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. Thanks to global market events of the past half-dozen years, many options exist right now for where to buy to make money while also making a new life. Further, 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 an investment return, in the form of capital appreciation, rental return, or both. This perfect storm of objectives should be your ultimate goal. A holiday home on the beach of Nicaragua can become little more than a headache and a carrying cost if you ultimately decide you can’t abide life in the tropics.

Then there’s the potential tax upside. The travel associated with scouting for, purchasing, and then managing (in the case of a rental) a real estate investment overseas is tax-deductible.

Years ago, I knew a lady named Janet who bought land on the southwestern coast of Ireland, in Kerry. On this land Janet built two houses, one for her personal use and one to rent out. Each summer, Janet took a trip to Kerry to check on her rental property and to meet with her rental manager. During the visit, she stayed in one of the two houses she’d built, her Irish home. The income from renting out the second of the two houses covered the carrying costs and then some for both properties, with money left over to subsidize Janet’s annual holidays on the Emerald Isle. Then, every April 15, Janet was able to take those travel costs as deductions on her U.S. tax return.

These fundamentals will be the starting point for the discussions during our first-ever Global Property Summit taking place in Panama April 14-16. For this one-of-a-kind How, Why, And Where To Buy Real Estate Overseas event, we have invited our top property experts, advisors, and resources from more than 20 top property markets. These are the world’s most respected and successful property investors, folks with decades of experience buying, selling, and making money from global real estate.

Whether you’re a would-be first-time buyer or a seasoned pro, you want to be in the room to hear what they have to say.

Kathleen Peddicord

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