How to Diversify Your Overseas Investments
When creating your own tailored investment plan, many successful investors have stated the importance of diversifying your investment portfolio. These astute investors will always aim to diversify their portfolio by placing their money in a variety of investments such as: stocks, bonds, precious metals, and real estate.
Although it is important to note that having all your money invested in stocks or bonds that are based in your home country is not truly diversifying. For example, if you reside in the United States and have invested in U.S. based stocks or bonds, as well as American real estate then you would be considered as being invested in only one market. Why you should diversify is because, say for instance, the U.S. economy suffers another financial crisis or recession, then all your American investments would be affected negatively no matter the sector you were invested in.
Therefore, it is always sensible for one to truly diversify their wealth by including investments outside of their home country in their portfolio. International or ‘offshore’ investments can offer people the diversification they require, while at the same time providing them with assets that they can enjoy. For example, instead of buying stocks in international companies and foreign currencies or adding precious metals to your portfolio, you could instead purchase real estate in an overseas country. Buying real estate outside of your country of domicile is considered one of the most solid investment options for those who want to enjoy their investment while at the same time receiving a great return.
Although you must be aware when buying real estate overseas, that it is vitally important to undertake comprehensive due diligence, as well as understand the property laws of the respective country you are investing in. It’s also essential to seek and deal with reputable companies within the local jurisdiction to ensure that you are getting what you believe you are purchasing.
These points are important because you may assume that when buying a property in an overseas jurisdiction, you will receive the official title for that property. But in some international countries this is not always the case and hence working with people that you can trust, and who will help you through the entire process can keep you from buying into a property development that you will later regret.
Knowing the specific questions to ask, and the procedures which need to be followed are key to avoiding the potential pitfalls involved with international real estate investment. Another success factor is when reaching the point of needing to finance your real estate purchase, that you work with an experienced international bank, such as Caye International Bank, who have many years of experience in international banking.
Global Housing Outlook for 2017 and Beyond
The international real estate market has been rapidly evolving over the last several years. This is largely due to many more North Americans considering purchasing property overseas, some of which are planning on retiring in the near future, and want to move to a country ideally within Central and South America where their money can go further and provide them with a comfortable lifestyle in their retirement.
The property markets within these regions have become increasingly more competitive. Buyers are now visiting a number of these countries before retiring to determine the area best suited to their retirement needs. More and more North Americans have purchased real estate in Central and South America, in some cases due to them falling in love with a location and wanting to enjoy it as a vacation home with their children, others see their property purchase as a warm place to visit for a couple months a year when winter arrives in North America. There are others who have made the decision to go ahead and purchase their retirement home well in advance of to ensure they reserve a property in the exact locale they would like to live and retire in.
One of the primary benefits to real estate investments is being able to have a return on investment through rental income. Although there are others who have taken it a step further due to realizing that they can turn this model into a fully-fledged business by renting their international homes out, which enables them to receive a steady cash flow and provides them with the potential to purchase more properties as investments and thus generate higher returns.
Interview with an Offshore Investment Professional
We recently interviewed Lief Simon who is the Editor in Chief of Offshore Living Letter; the Founder of Simon Letter and Global Property Advisor; as well as the Co-Owner of Live and Invest Overseas which is widely known for their hosting of international conferences.
“Our conferences have historically focused on retirees because these were the people most interested in learning about investing and buying overseas,” says Lief. “However, at our conferences now we’re seeing a shift to a younger demographic in their 50s, 40s and even 30s with young kids. Some of them are looking specifically to invest overseas but a lot of them are looking for that lifestyle exposure and adventure of something new. They may not have the necessary amount of money to invest but what they do have is an entrepreneurial spirit, motivation and just enough money to start something, whether it’s opening a bed and breakfast or a pizzeria.”
Lief also goes on to mention a fascinating new opportunity for investing in Latin America which he says is growing in popularity, and that is the agricultural sector. There are companies who now offer the opportunity to international investors to buy plots of timber or invest in coconut production and this unique type of long-term investment has been showing consistent above average returns for several years now. Simon goes on to say that this is obviously not something in which you can use to vacation at or rent out, but it’s another type of diversification which is starting to become more mainstream due to agriculture investments being classified as less volatile within the marketplace. This due to agricultural investments having a sustainable demand, and don’t require the onerous management and upkeep that comes with home and condo investments.
So How Do You Get Started in Investing and Diversifying Overseas?
The first place to start is by opening an international bank account. An international bank account gives you a place to move your investment money to, so when you are ready it will be available. Furthermore, international banks offer different types of financing which could help you to purchase your property investment overseas.
Caye International Bank is considered a great place to start by offering a full range of traditional and non-traditional banking services and accounts in multiple currencies. An application for account opening with the bank is a simple process and can be facilitated from anywhere in the world, and thus Caye Bank should be your first port of call in helping you create a diversified international investment portfolio.
For more information about the bank and how to get the account opening process started with Caye Bank, please submit a contact request via the form here or simply give them a call today at 011-501-226-2388.