The Positive and Negative of Investing in Global Real Estate

In Blog by InvestaCrowdLeave a Comment

Making just 1.0% interest (or less) in the bank is a bad joke in this day and age, it is also a loss making episode as inflation rises faster than the interest your hard won dollars are earning. Traditional banking has had its time in the sun. Our full and unequivocal support goes out behind all Fintech solutions that offer a more fair and reasonable deal. My philosophy on investing and money is that I generally only ever keep subsistence cash reserves in the bank (making almost zero returns, but saving some money for a rainy day) and invest most of my cash into real estate as soon as the right deal comes along.

We also believe diversification of your investment portfolio is intelligent and necessary. Every investor should do all the necessary due diligence on any deal they want to do, feel good about making that investment, and most importantly, be able to lose all that money and still be ok with it.

If you happen to be born or are living in Asia, you may be in either in a city that has the highest real estate prices on the planet or in markets that are going backwards, or simply be in a position where too much capital is required to even begin real estate investing. We hope to be able to help in this department.

I want to share some thoughts on the pro’s and con’s of cross-border real estate investing. Every deal and every country is different. To state the obvious, investors should know and be 100% comfortable with all the legal and tax implications for their investments into any/foreign real estate projects. Some of the advantages can actually turn out to be disadvantages and vice versa. I will thus list the considerations you should take note of in cross-border real estate investing. Keeping in mind that unless you are happy with the 0.9% being offered by many banks (we are certainly not), there is always a risk of these considerations swinging against your favor.

Key considerations when investing in cross border real estate, and the difference in importance of each point will vary investor to investor, but this is what should be kept in mind:

  • Real estate in your local market – is it overpriced, or just too expensive or even losing value?
  • You live in a city that has very high real estate prices, so even the minimum entry investment is still above your capability
  • Currency valuation in your home country (+-)
  • Currency in your desired country of investment (+-)
  • Tax rates (+-)
  • Diversification of your overall investment portfolio
  • Real estate cycles are different all over of the world (+-)
  • Term of investment (+-)
  • Liquidity of investment
  • Quality of project/developer/sponsor
  • Your motivations for investing – just making money, lifestyle, future visions of where your kids will go to school or where you may want to retire
  • Time consuming/costly to research and review (+-)
  • Who do you trust/ Is there transparency/Are you clear on how it all works

On the right side of most of the points above, it can be very attractive to make cross-border real estate investments. However, it is very time consuming and costly to look at cross border deals. That is just one problem that we, atInvestaCrowd, are helping solve. We provide accessibility  and believe in offering quality projects to build trust, transparency and credibility.

InvestaCrowd is an an Asian based real estate crowdfunding platform, bringing our members institutional grade real estate investment opportunities from markets with clear transparent legal systems, and real estate developers who have proven and successful track records.

We welcome all comments and questions and to find out more about cross border real estate investing and what we are doing over here, please login and create an investor account at InvestaCrowd.

Thank you

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