What to Consider When Investing OverseasInvesting in property is an incredible opportunity. With the expected benefit of earning a side income or generating a lump sum return, property investing can be a great game to get into. The key to being successful in property investing is awareness. By constantly being aware of the market, factors surrounding your property and other aspects which will impact your property investment you will hold the ability to determine influences and next moves.
This applies whether you are investing locally or abroad in a foreign market, diligence is vital. Each property investment brings its own set of risks, many worthwhile, but still present. This increases the need for an investor to remain aware and perform their own due diligence before committing to a property investment opportunity.
Throughout our time in the property industry we have established key factors which require focus when an investor aims to invest in property in a foreign market. This article looks at these factors in detail to determine where an investor must concentrate to assist them in reaching success.
RiskThere is a risk element in every investment an investor chooses to commit to, however, it is merely a case of analysing which risk is worthwhile and determining how you will manage this risk to work to your advantage in some ways.
Before committing to investing in an overseas property, outline which market you are aiming to attract. With a clear idea of the type of tenants you wish to appeal to and understanding how they will assist you in achieving your objectives, you can determine which properties will work for you with limited risk.
Outlining this will also contribute to your decision of which investment strategy to adopt.
ResearchResearch and due diligence are vital in any investment, and can therefore be argued, increasingly essential in overseas property investment. Failure to perform due diligence could easily land an investor in a bad situation. Through extensive research, an investor can gain the information they require to make their property investment a success. After all, knowledge is power.
TeamInvesting in property is a challenge at the best of times, therefore, investing in properties abroad, with limited access to management, presents greater challenges. Ultimately, this means, establishing a strong team to work with you is essential.
Taking the leap to invest overseas will require great trust in those helping you achieve your goals. You are looking for a team who can demonstrate their knowledge and experience within the property market. The benefit of working with a team based in the country you are investing in is obvious - they have local knowledge and greater experience in the area than you. This pairing will work to your advantage.
ROIEveryone knows the determining factor of a property investment is the return of investment it offers. With a figure in mind of what you aim to secure to achieve your objectives you can narrow your decisions and establish which cities and property types will work in your favour.
ValueMuch like hunting for an ROI that will suit your plan, finding a property that has the opportunity for value to be added is also important. A property with the potential to add value through renovation or otherwise can be a great addition to your portfolio. Meanwhile, by adding value, you increase your chance to succeed and earn a profit.
ConclusionThere are many factors to consider when looking at investing in a property. By analysing the outcome of each factor and assessing its impact on your investment, you clear the path for your investment to become a success.
Risk is apparent in any investment, regardless of whether it is property investment or other. While risk is present, not all risk is off putting. As this is expected, there are some risks that can be embraced when an investor is careful. This opens up property investment opportunities and even contributes to the experiences of an investor.
Property investment is a huge commitment and one that can become daunting rather quickly. This is why surrounding yourself with the right support network is crucial. The property industry is one that is well connected, allowing investors to learn from one another and utilise the knowledge and experience of those surrounding them. With a strong network and team an investor can confidently commit to an investment.
Its obvious, return on investment is potentially the most important factor when considering an investment. This is why investors must carry out extensive due diligence and determine what their potential return will be and when they can expect to make a profit.
Much like return on investment, an investor must be aware of the property’s value upon purchase and then consider how their contribution can add value to the property, earning them a profit. A property that will cost more in repairs than it will generate in profit or a property that is newly renovated in which needs no refurbishment will struggle to earn an investor an increased return.
Disclaimer: This is information based on our knowledge gained throughout years of experience, education and learnings. This information is open to interpretation, therefore, you must carry out your own due diligence regarding the subject.