More people than ever are looking at overseas property investment as a way to make money.
Properties are cheaper and there are some big gains to be made, but a large amount of investors when buying overseas property investment fail to balance the risk reward correctly and lose.
Here we will outline some basic overseas property guidelines to ensure that you have the best chance possible of making a solid gain on your investment.
Would you buy any investment without a track record? Probably not, but many investors do this when they buy overseas property investment.
They simply want cheap property and the biggest gain possible but this more often than not ends up in big losses.
They are tempted to buy new markets that could take off.
The big variable here is “could” Sure, if it takes off then big gains could be made but why take the risk?
1. Buy a property market with a track record
You want to know the overseas property market you are buying has a track record of solid gains and low downside risk. Property trends go on for a long time and the fact you missed the start doesn’t matter.
Buying into the trend will mean you are buying a POPULAR area and chances are it will get more popular.
2. Looking for future potential
When buying an overseas property as an investment look for solid reasons why the investment will rise in the coming years, so look for:
1. Rising foreign capital and migration to the country
2. A general consensus that the country is accepted as safe and a good location
3. There is a solid reason for the trend to continue
For example, the baby boomer generation in the US has its eyes on Central America it’s close, safe and encourages foreign investment. With high prices in the US and the baby boomer generation looking to get a better lifestyle at lower cost, the trend will likely continue.
4. An established foreign community
Gives others confidence to invest, so more tend to follow as a result. People like to be around people from their own country and a large well established foreign community will do this.
5. Getting the right location
When buying an overseas property investment look for the up and coming areas. As a market develops so do new areas and these are the ones to buy chances are they will become established areas and yield similar gains
When looking at your overseas property investment look for the above and try and buy near new significant changes in the infrastructure such as marinas, hotels, roads etc.
6. Property trends last for years!
A popular market can take a long time to run out of steam. As it develops there will always be opportunities for profit and you have the comfort of having a track record of gains and these are a guide for what future gains will be.
If we look at Central America again the Costa Rica property boom is now over 10 years old, yet savvy investors are still making triple digit gains in just a few years by buying into the rising trend.
7. Balancing the risk – reward
With the above strategy you won’t buy the cheapest overseas investment property, but you will buy competitively priced property and have the best upside potential, to lowest downside risk and that’s what most investors want.
8. Be a pioneer if you wish
If you want to buy overseas property investments and be the first in fair enough, but keep in mind the risk. Your market may never take off, or you could wait a long time.
The pioneers made big money but most fell to arrows!
If you want a solid return with low risk on your investment, then buy an established market, which is rising in popularity.
Pick your locations in up and coming areas and you will have low risk and the potential for solid or spectacular gains ahead.
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