When faced with decisions regarding property investment, there will always be the question of “Should I invest in property overseas?”playing in people’s minds. As they say, the grass is always greener on the other side. Investing in property is more often than not a profitable venture, and in the case of overseas real estate, the risk and responsibilities may be higher, but the rewards also consequently higher. Understandably, the next query by interested Malaysians will be “Why should I invest in overseas property?”, so here are some compelling reasons that will (hopefully) have you nodding in agreement.
It can be surprisingly affordable
Of course, we’re not talking about cities with high cost of living, especially when it comes to housing, like Hong Kong, Shanghai, Singapore, London, or New York. Some of the most livable cities in the world like Perth, Vancouver and Auckland allow investors enjoy the best that these cities can offer at surprisingly affordable prices. Alternatively, if you prefer just a slight change of scenery not too far from home, Southeast Asian countries like Cambodia, Thailand or Indonesia are also fairly good choices.
Helps you generate cash flow in another currency
Investing in foreign real estate not only helps to diversify your portfolio, it also helps you benefit from appreciating currencies like the Australian dollar (A$), Singapore dollar (S$), US dollar (US$) or even British pound (£).
Acts as a hedge against inflation
Historically, land has always been one of the best hedges against inflation and turmoil. Real estate is better than any cash flow in paper currency, because it is a hard asset that retains value independent of any paper currency’s nominal value. Even if a currency weakens, property will still retain its value and will only appreciate with time.
Has multiple uses
So what if the property you invest in doesn’t have a house built on it? No problem! Land can be used for multiple functions, including agriculture (plants or animal husbandry) or forestry (wood for construction and furniture) while you wait for the area to be developed and populated before building a structure – such as shop or home – on the land. Empty land can also be cleared, cleaned and used for special functions like outdoor events, bazaars, parties, parking, etc.
You get to retain control over your property
This means that you can buy, sell, rent, or develop your land or property according to your schedule and requirements. (As law-abiding investors, these actions will of course be carried out within what is allowed by the local laws and regulations.) If you own multiple properties overseas, you may be obliged to hire somebody to manage and oversee any developments to be reported back to you.
Most importantly… It’s fun!
What’s better than having a holiday home in another country? Not much, I would say. Your real estate investment can double as a personal retreat, part-time residence or vacation home. It will appreciate in value while generating rental yield (if you rent it out), not to mention you’ll have a nice little retirement home or passive income when the mortgage is complete and it’s time for you to retire.
As Mark Twain said, “Buy land, they’re not making it anymore.” This is very much and undeniably true; you can make more and more money, but land is a finite resource which gets lesser each day.
International Living (link)