The real estate market has produced more millionaires than any other asset class. It’s one of the easiest asset classes to understand, and it has a lower barrier to entry than most people think.
And while American investors are fighting each other over the limited inventory here in the US, smart investors are looking to diversify their portfolios with international real estate.
Diversification is key to surviving any market conditions that will come your way. And one of the best ways to diversify is by choosing properties in very different locations.
But why exactly should you invest in a country you don’t live in? Keep reading below to learn why investing in property internationally might be one of your best decisions yet.
Table of Contents
1. Global Demand
Planet Earth recently hit a new milestone. There are now more than eight billion people in our world, with the number increasing by the day.
In every country, whether rich or poor, real estate is in high demand. It’s the only asset class where every single human is a consumer. Everyone needs a place to live.
Whether the economy changes, the market collapse, or the next industrial revolution comes about, people want a comfortable, safe place to live. And they will always be willing to pay for that.
The demand for rental homes, apartments, and condos is just as high in other countries as it is in the US.
Investing in real estate abroad allows you to diversify your portfolio, so you aren’t dependent on one geographic location, one city, one state, or one country.
When the US is experiencing an economic downturn, where rents are decreasing, other parts of the world might not be. If you have a property in these other locations, your portfolio could still maintain balance, protecting your overall wealth.
2. Cash Flow With Appreciation
So why invest in real estate internationally, as opposed to investing in international stocks?
One of the biggest draws of real estate over all other asset classes is the ability to generate consistent monthly cash flow (profits), while also experiencing appreciation.
And not only that but the loan you have on the property is getting paid down every single month by your tenants. So every month, your equity in the home increases in two ways. Plus, you get cash in your pocket.
Building up a portfolio of homes can help you generate serious wealth as fast as possible. And it can quickly become a passive income stream for you.
No other asset class offers income potential like this. Especially since real estate has the potential to be completely passive. By working with reputable property managers in your chosen international market, you can sit back, relax, and collect your cash flow.
3. International Real Estate Tax Benefits
One of the biggest perks when investing in real estate is the taxes. Real estate is the most favorable asset class when it comes to saving money on taxes.
In fact, that’s why so many people who build their wealth outside of real estate end up buying as much property as they can. Investing in real estate helps them take advantage of tax-saving strategies to preserve and grow their wealth more effectively.
And yes, when you invest in property internationally, you will experience a lot of the same tax benefits when you file your US tax return.
If the property is rented out full-time (or most of the time), you can generally deduct all of the expenses associated with owning the property. This includes things like mortgage interest, utilities, repairs, insurance, and property management.
And if you need to visit the property before you buy it, or at any time in the future, you can likely write off your travel expenses as well.
You also get to take advantage of depreciation, which is one of the best parts about owning a property.
This makes a big impact on the amount of taxes you’ll pay since depreciation can lower your taxable income.
4. Invest in a Place You Want to Visit
When it comes to international real estate, the world really becomes your oyster. You can invest almost anywhere.
You can either look for markets that show strong signs of growth, helping you ensure the best ROI. Or you can invest in places that you want to visit.
This is especially common for those who will rent out their properties on a short-term basis. That way, you can visit the property whenever you want and have a free place to stay.
It’s like getting paid to have a vacation house in your favorite destination.
Even if you don’t plan to stay in the home at any point, you’ll likely visit the property on occasion. This provides a great opportunity to travel and experience new places, versus investing in boring American suburbs.
5. Easier Than Ever Before
In the past, investing in foreign real estate was very complicated. Every country is different and has different laws concerning real estate, financing, income, and everything else.
If you were to try and do it on your own, you’d have a very hard time. Especially in a country where English isn’t the primary language.
But these days, investing in international real estate is easier than ever. You can find an English speaking real estate agency in many different countries and cities around the world that can make the process very easy for you.
They can help you navigate all of the ins and outs of investing in that particular country or city. Whether you need help buying a property, renting out a property, or eventually selling a property, you’ll have a team of local experts who understand you, to ensure there are no miscommunications.
Expand Your Portfolio
What sounds more fun? Investing in Peoria, Illinois, or Seville, Spain? Investing in the US is one of the best things you can do. But if you want to take your portfolio to the next level, it’s time to consider international real estate.
Looking for more investing ideas like this? Then head to our blog now to keep reading.