Real
estate is a tried and tested asset class and the majority of people agree that
as a long term investment commodity there is nothing really to beat it for
consistently returning strong growth and increasing yields…however, when a
country's housing market goes temporarily cold as real estate prices move
outside of the affordability gap, real estate investors often look overseas for
the development of their property based portfolio.
Currently
the real estate markets in countries such as the UK and US are slow and the
ability to profit from property locally is reduced - therefore more people than
ever are thinking about moving their focus abroad and starting an overseas real
estate portfolio like investing in Kenya real estate to enable them to build a
passive income for life.
If
you would like to learn more about building a passive income for life from
investing in overseas real estate here are the main five considerations to bear
in mind to maximize profit, reduce risk, increase yields and capitalize on opportunities
as they present themselves – but before we begin it is always prudent to
mention that the value of any investment can always go down as well as up, and
that investment decisions should be taken carefully and be made with the
assistance of qualified and experienced advisers.
Tip
One - Real estate markets around the world emerge, boom, go bust and re-emerge
all over again, but they do so at very different points in time as each market
is heavily dependent on the current state of the economy in the given
country. As we all know economies ebb
and flow like the tide and there is no such thing as a guaranteed market where
property prices will keep rising.
However, there are countries in the world going through major economic
change where the real estate market is emerging and where the long term
forecast is for a period of prolonged growth.
An investor who is not risk averse and who is planning an overseas real
estate portfolio should try and identify which countries have a strengthening
economy and an emerging real estate market.
Tip
Two - Having found an emerging market an investor needs to determine the key
factor that makes an investment into real estate in the given country a good
decision. I.e., if a country's property
market is simply booming because of hype and an investor can see nothing to
support the long term success of the market then they should walk away. If an investor can see massive room for
growth but an interfering government who may attempt to restrict property
investors from taking their profits then an investor has to decide whether or
not they can still make enough profit from real estate to make any investment
worthwhile.
Tip
Three - Having determined that there is potential within a given market an
investor needs to learn how to harness the power of other people's money! As real estate is an expensive and slow to
liquidize commodity it is unwise to pay cash from personal funds for an
investment property, rather it's wise to raise finance at a low interest rate
from a secure financial institution. An
investor should look into whether an international mortgage or a local mortgage
is possible and affordable when buying overseas real estate.
Tip
Four - As previously stated, over the long term real estate is considered by many
to be one of the most consistently returning asset classes – the key to this
consistent success is however the 'long term' bit! I.e., when buying real estate abroad for
capital growth and rental yield it pays to be able to keep that real estate for
ten years or more to ensure the greatest reward is derived from the investment.
Tip
Five - And finally, having determined that the key factors exist to suggest
that a property market has legs to run and that any hype surrounding its
progress is based on fundamentally accurate facts as detailed in Tip Two, an
investor need to ensure they buy real estate that will suit the market demand
that is making the real estate market successful! Therefore if the baby boomers are driving a
given market consider buying single level properties in secure communities, if
on the other hand the young professionals are driving the market think about
purchasing well located, designed and facilitated apartments.
Get more tips on www.kenyan-real-estate.com
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