Investing in foreign real estate is a venture that requires employing smart investment tactics to succeed. However, these tactics largely hinge on the investor’s goals and can greatly differ. Here, we share five proven strategies:
1. Exit Strategy
Investors should first formulate an exit strategy, a comprehensive scheme focusing on the manner and timing of selling the investment for profit and the possibility of reinvesting. Prior to placing your initial offer, it is crucial to outline this step and seek professional real estate advice. Monitor the economic climate, job market, and interest rates in your chosen location as they can notably influence your overall profit.
2. Buy-to-Hold
Often recommended in real estate circles, this strategy involves buying a property with the intention of renting it out for recurring income as well as capital appreciation. Typically, an investor would hold onto the property for 2-5 years before selling, renting it out in the interim as a holiday home or long-term rental.
3. Flip
This short-term approach allows for quick income generation. Investors purchase a property and swiftly resell it before officially taking ownership. Key to this strategy is finding properties that are below their market price. These deals usually pan out over 18-24 months and can result in ample capital growth.
4. Renovations
This tactic involves buying a low-priced property and boosting its value through significant enhancements. The house is then sold at a profit in the future. This tactic is popular among first-time buyers who do not have sufficient funds to wait for capital appreciation on an investment.
5. Wraps
The wraps method revolves around purchasing a property below market value then selling it at market rate, but retains the existing mortgage. This provides a consistent flow of marginal income instead of a lump sum payout, which can be particularly beneficial for investors with little to no down payment funds.
Having picked a strategy, you’re ready to look abroad for your real estate investment. Here are our top 10 suggestions:
1. Tuscany, Umbria, and Lake Como areas in Italy – consider these classic locations that are replete with lifestyle investments.
2. Florida, United States – currently offering prices 30% off their peak.
3. Tarn, France – this region is increasingly sought after and promises strong value.
4. Franschhoek, South Africa – a yet-to-be-discovered gem in the Western Cape.
5. Barbados – despite higher prices, demand is stable.
6. Berlin – a perfect choice for investors given Germany’s dominant rental market.
7. Turkey – offers affordable flats in tourist areas and potential high return prospects in Istanbul.
8. Brussels – can provide rental yields of 5.5% with a resilient housing market.
9. Malta – favored by retired Britons, the rental market is thriving and property taxes are less stringent.
10. Atlanta, United States – provides opportunities to purchase repossessed properties along with assured rent for two years.
