Property Investment Abroad? Good or Bad? The chances are that you have, over the last few years, heard, read or seen on TV that offshore investing is becoming more popular with the ‘average’ South African looking to find ways to fund a more comfortable future for themselves, especially when it comes to their retirement. Changes in the law have made it easier to do so, and the idea is catching on, as people realise that offshore investment is not just reserved for the rich, famous and James Bond villains.
One of the ways sometimes touted for South Africans to invest overseas and gain a valuable, and potentially rather enjoyable, asset is to invest in a home abroad. But while having a foreign holiday home is certainly a nice idea how does it help you gain financial security for your golden years? Allow us to explain.
Property Investment Abroad
The Chance to Keep Your Money in Another Currency
Investing in a piece of foreign real estate is a great way to diversify any investment portfolio. As the Rand is not always the most stable of currencies it can be very beneficial to hold some of your assets in appreciating currencies. While no currency is completely safe or stable there are some more likely to hold their value, including the US dollar and some European currencies such as the British Pound, the Danish and Norwegian Krones and even the Singapore dollar.
Property Investment Abroad
Foreign Property is a Good Hedge Against Inflation
Owning any property, but sometimes for South Africans especially foreign property, is usually much better than cash flow in a paper currency. Real estate is a hard, not soft asset which can retain its value independent of any currency’s nominal value. In terms of saving for the future, this is truly beneficial.
Property Investment Abroad
You Have Lots of Options
Once you own a home abroad you don’t necessarily need to leave the country immediately. Renting to third parties is always an option and should the real estate market in which the property is located get ‘hot’, as some do, there would always be the option to sell for a profit and then reinvest the money in another property, in other areas of your investment portfolio or both.
Property Investment Abroad
You’ll Have a Holiday Home
If you purchase a home in an area of the world you personally like to be in – or think you’d like to be in, you will also gain a holiday home that can be retreated to at any time. Some choose to buy in an area they eventually intend to retire to, or at least spend significant amounts of time in, and then choose to rent it out until they are ready to make a move, allowing them to earn even more in the way of extra income. So, if you’ve ever dreamed of retiring to a little country cottage in Europe, or exploring life in the hustle and bustle of a big US city or even the glamour of an exotic locale like Singapore this might be a way to fulfill those dreams.
Property Investment Abroad
A Little Advice
Before you make a move to invest in a home abroad, take the time to seek some professional advice. A financial expert can help you understand the ins, outs and logistics of purchasing real estate abroad, help you discover the best markets and how to best make the purchase fit in with the rest of your investment portfolio for the best possible results.
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