Investigating the potential of foreign investment in property.
As a viable long-term investment and a passive revenue-generating source, the real estate market has long been viewed as a safe yet profitable investment. The stagnating domestic market, however, has resulted in a growing number of savvy Indian investors turning to foreign shores. The low financing options and reasonable rental returns make for an attractive case to purchase property overseas. The rise in global connectivity has increased the possibility for individuals to own property outside their home countries. Governments like that of the United Kingdom and the United Arab Emirates are also offering attractive incentives to boost foreign investment.
We break down 4 key reasons why you should consider investing in foreign real estate:
1. Multi-currency financial gains:
Each financial year sees a change in the highs and lows of country-specific currencies. For example, in 2019, the Euro is one of the strongest currencies. An investor who has made a foreign investment in Europe real estate will have the advantage of earning stable rental income irrespective of the rise or decline of the Indian rupee. On the other hand, foreign investment also acts as an inflation hedge safeguarding your assets despite any decreased power a currency might face.
2. Diverse utilization of properties:
A recent report published by The Economic Times revealed that most Indians buy property abroad as an investment with great scope for capital appreciation and high rental yields, this is closely followed by aspiration of having a second home. When it comes to the desire for a second home overseas, the report found that children’s education and retirement planning factor significantly in their decision making.
3. Tax and migratory benefits:
Countries are now focusing on attracting foreign investors to promote the growth of their economy. In the process, many now offer tax exemptions and residence permits exclusively to international investors purchasing properties in their countries. The UAE for example now offers an exclusive long term residence permit. The ‘gold visa’ allows a real estate investor up to 10 years of residence in the UAE along with the freedom of movement to enter and exit the country as per the individual’s convenience. Malaysia’s government has also been working towards forming new policies with their ‘my second home’ program offering investors significant benefits in terms of permanent residency, making the Malaysian real estate market one to watch out for.
4. Global expansion of portfolio:
Diversifying your investments minimizes the risk of loss. When your capital is not concentrated in one specific country, it allows you to protect your assets despite any political or economic alterations that may occur. It also allows you to protect and accumulate your capital in various hatchets instead of one which lowers your investment risk. Having a diverse portfolio helps you gain access to an increased number of investment options, opening up opportunities for your financial growth. Expanding your portfolio lets you assess and plan a stable future for you and your family. As an investor, having a diversified portfolio gives you higher credibility in the market as well.
Key considerations when investing in foreign real estate
Factors like return on investment, the standard of living, amenities and security play a crucial role in selecting a foreign property to invest in. While foreign real estate can be a fruitful investment, it is important to carry out a thorough analysis of the market you’re looking to invest in. Each country offers a unique range of properties, tax exemptions and migratory benefits that can help your investment become your strongest asset.
Interested in learning more about investing in property overseas? Get in touch with us at [email protected] for a free consultation on the best foreign real estate market for your investment.
