The USA’s trade war with China is already creating headaches in the domestic investment sector. According to consultants Rhodium, foreign direct investments fell 92% in the first quarter of 2018 as a direct result of the trade war. Additionally, Chinese investors sold over $9bn of American assets.
This creates an opportunity for domestic investors, but also risks. Unless the level of investment can be maintained, there is a risk that projects and companies can go under. For the savvy investor, one of the safer routes to protect their cash and create profits is through offshore property investment.
How your funds are protected against politics
The trade war against China and the EU is bringing heat on American products relying on free tariffs for export and import between the three trading blocs. The result is a volatile environment domestically and within those three main areas of investment which has led experts Bloomberg to note that risks will be much harder to spot. Furthermore, with developing countries likely to suffer less than America, China and the EU, you can expect to see an uptick in their market. This means that, despite competition, prices will rise, creating a more lucrative market.
It’s also likely that the offshore property market will boom from pragmatic savers, retirees among them, seeking to find property out of the ‘front line’, so to speak. Already, a further 100,000 retirees emigrate every year, according to State Department statistics concerning retiree payments. This shows an increasing trend, and is a great investment opportunity for property investors. Retirees are likely to invest in or rent developments and annexes when seeking a comfortable retirement, and tend to be secure investors due to the mortgage or equity products they have access to.
Selecting your markets of interest
Moving your investment strategy offshore is a great first step towards obtaining profit independent of the ongoing trade wars. Being assured of your investments and their security is the next. With those in hand it falls to make a decision on where you put your money. Finding the area that will produce the most rent or resale value is absolutely crucial to make your strategy worthwhile.
Those seeking to turn the highest profits need to look for areas with high upward mobility and relatively high rents. According to Nomad Capitalist, this can be found at a huge range of locations around the world – some unexpected. For example, Moldova – an aspirant member of the EU, but not yet embroiled in its problems – typically represents one of the world’s highest ROIs. Tax havens, of the ilk of Panama, are also great opportunities, especially if there is a tourism aspect to the island that can be utilized through services like Air BnB. The economist produces a list of the most rapidly developing countries. It’s not a bad idea to take a look down the list and begin research there.
The trade war is putting a clampdown on property investment between the world’s three largest trading areas. This doesn’t mean it has to put a block on your success as an investor. Looking overseas, you can find multitudinous opportunities to put your marker down and profit from the result.