For the last few years, a number of investors have turned their attention to international markets in an effort to secure a profitable investment.
This was driven largely by the rise of the Australian dollar, which meant that for the first time in many, many years, the opportunity to buy overseas became very appealing.
Our dollar began inching towards parity at the onset of the GFC. For a few days in November 2011, our dollar even overtook the US currency, trading at around $1.10, and it has hovered around 90-95c ever since.
With the Australian dollar so strong, investors have been keen to leverage it to take advantage of the drop in property prices that have occurred in the United States.
For a little while, the thing was that you could buy a property in the US for $40,000 today and in 12 months time, when the Australian dollar was only worth 70c against the US dollar, you could sell your investment and make a 30% profit.
You could then bring the money (minus fees) back to Australia to invest locally.
Of course, the dollar never did fall to 70c. So, while you may have been able to buy a property in the United States for as little as $35,000 to $40,000 – and rent it out for a positive cash flow – you won’t be able to turn a quick profit on your investment any time soon.
There are also a number of property management issues to consider. Managing a property from afar can be challenging in its own right, but when that property is in another country, there are further considerations, including:
Property management – finding the right PM and ensuring they do the right thing by you as a landlord Dealing with tenant issues – again, you need to find an experienced and trustworthy PM to manage this on your behalf Timezones – contacting your tenants and realtors can be difficult when you operate in opposite timezones
If you do have a desire to purchase overseas, please feel free to contact us so we can discuss the potential risks and rewards with you. Investing internationally is not the time to simply follow your gut; you need to do extensive due diligence and have the right support and best advice to ensure you don’t end up in hot water.
Contact us now on 1800 690 890 and ask for Paul, or email firstname.lastname@example.org.