Investing in overseas real estate is a great way to start internationalizing your portfolio and your life, and it comes with a slew of advantages beyond simply diversifying your assets.
Buying overseas real estate not only protects your wealth but also allows you to make larger returns and improve your tax strategy. You may even be able to obtain a second residence or passport as a result of your investment in some countries. Here are five advantages to consider if you’re thinking about investing in overseas real estate:
Diversification is Generated
In many ways, investing in overseas real estate can help you diversify your life. You can reasonably plan to reside in another country part-time or in the future if you own property there. You won’t have to deal with renting if you decide to stay in that country for an extended amount of time because you own a home or apartment there. Furthermore, many countries may grant you a resident visa if you invest in real estate there. Check out Kukio Hawaii real estate.
Optimizes Tax Strategies
International real estate ownership can also help you save money on taxes, regardless of where you live. If you’re a US citizen, you’re probably well aware of how difficult it is to lawfully minimize your tax burden. As a US citizen, it’s extremely difficult to reduce your tax burden due to citizenship-based taxation and policies like FATCA. While you may be eligible for some deductions if you live overseas, they only apply to a tiny amount of your income, and you must still pay full tax on all passive income, such as capital gains.
Yields Better Returns
People buy overseas real estate for a variety of reasons, the most common of which is to increase their financial returns. You won’t make a lot of money on your real estate investments in most developed countries. My Australian friends, for example, say they’re content with a 2% annual return on their investments. These types of markets are likewise cyclical in nature. If you buy a condo in New York or London, you won’t lose your entire investment, but you might be stuck with it for longer than you expected if you have to wait for the market to recover.
International real estate allows you to construct a second residence while also providing you with a permanent location to return to if you need to leave your current abode. It may also provide you with a second passport in specific situations.