One of the best ways to diversify an investment portfolio is to consider buying real estate abroad, an option that has many advantages over investing too heavily in domestic properties. Having assets in multiple economies can be a great hedge against market fluctuations, and real property remains one of the most secure investments. While the US economy continues to be a steady engine of growth, real estate in the developing world can offer impressive returns, especially in countries that are enjoying explosive economic expansion, like Brazil.
Investing in real estate abroad means earning an income stream in another currency, a useful hedge against the dollar and a helpful way to benefit from the growth of developing economies. Investors can also often find properties at prices well below US equivalents. South American beach property is often an order of magnitude cheaper than property on North American coasts.
Managing investment properties abroad can allow savvy real estate owners to realize significant tax savings, while the ownership itself provides numerous residency advantages. It can be tempting to “double dip,” as many investors choose properties that can serve as second homes or retirement homes in order to take advantage of cheaper costs of living abroad. However, investors should also consider other real estate opportunities, such as agricultural property, which may offer higher returns.