Investment and property markets used to be viewed in isolation and evaluated according to the financial climate for that country or region, but we are now in a global financial marketplace and the same can be said for investing in real estate internationally.
It is perfectly understandable that the majority of investors will still look to their own domestic market when investing in property, as it is an arena that they will feel they know well. But there are a number of sound reasons why international real estate investing may prove to be a sound strategy, which is why agents with a global reputation like Hamptons, are seeing a growing number of investors who want to diversify their portfolio.
Define your objectives
Considering and defining your objectives would be sound investment advice at the best of times but it is particularly relevant when you are considering international real estate investment.
It is fair to say that the nature of your motivation for wanting to invest in the first place, will have a significant bearing on the path you take to achieve those objectives.
If you are considering buying an overseas property for personal use for example, you are more likely to be influenced by the lifestyle elements that make a particular country attractive. Naturally, you will also have capital appreciation as another factor to weigh up, but if you want to wake up to the sound of an ocean, that will drive you towards certain property markets and areas.
If you are looking at purely investment purposes however, then your personal considerations will be far less relevant and your focus is more likely to be on achievable rental income, marketability and capital appreciation.
Choosing a country
It can often be a dilemma trying to choose a suitable country to buy property in, and location is just as critical in an international property market as it is in a domestic one.
Whether you are buying for personal or business purposes will continue to be a determining factor and if you are planning to use the property yourself you will obviously want to pick a country that has a strong appeal to you and offers the lifestyle that you are looking for.
Buying for investment purposes means that your focus should be far more concentrated on finding a country where economic stability exists and where the property market is still developing and growing, allowing for the potential of capital growth over time.
In it for the long-term
The same rules apply for international property investing as they do for buying real estate in your own country, the primary rule being that you must be prepared to consider the property you are buying as a long-term investment strategy.
You may well find that prices soar and you can sell for a profit in just a few years, but it is never wise to make that assumption and it is far safer to consider an investment period of at least five years as a minimum timeframe.