Over the last few years, with the economic markets as shaky as they have been, many investors have turned to a very solid, tangible investment strategy – real estate. In fact, the ROI on real estate investment has been a better value than other traditional assets like stocks or bonds. There are several ways you can profit from buying real estate, in fact.
Obviously the physical property or land is an opportunity for anyone looking for capital gain or rental income or both. Sometimes this gets tricky, though, depending on where you live and where you buy your real estate. It’s quite possible to become entangled in a whole mess of legal and tax snares if you aren’t careful and do your research.
Another way, and possibly more straightforward route, to profit from real estate is in the purchase of shares in a property fund or trust, which are becoming a more popular alternative for individual investors as well as institutional investors.
Along the same lines is a real estate investment trust, or Reits as they are commonly known in the United States and abroad. With a Reits investment, a company is obligated to distribute at least 90% of its taxable income to the shareholders on an annual basis in order to qualify, legally, as a trust. The advantage of a Reits for investors is the ability to gain greater diversification through investing in a portfolio of properties instead of a single piece of land or housing unit. Also, and this is great for the ‘hands-off’ approach to investing, the Reits trust is managed by experienced and qualified real estate professionals. In other words, the people who know what they’re doing.
As in a wide range of investments, getting the most from a real estate investment strategy can boil down to being in the right place at the right time. Despite a few challenging headaches, choosing to diversify through property purchased in several different countries and locations could be to your benefit since it helps cushion you from a downturn in any single market. If you don’t have any real interest in becoming a landlord, for example, it’s easy enough to invest indirectly through real estate related mutual funds.
However, and this is an added bonus, a real estate strategy can also benefit if you’re planning an offshore pension and intend to expatriate close to or right at retirement. It would be a great way to supplement your income while enjoying the offshore tax benefits. Or maybe you’ve been relocated by your company and need a stable residence. Again, it’s creative and long-term thinking that are going to pay off for you so don’t try to box yourself into one type of investment or asset protection strategy.
One thing to consider, though, is how your purchase of property is going to affect how you deal with property taxes internationally. How many and what kinds of taxes you’re going to be responsible for hinge mainly on where the property is at and what you’re going to do with it – is it a private residence or a rental? Where you decide to purchase is your own personal choice and you’re the only person qualified enough to make that decision, with the right professional investment adviser that is. While taxes shouldn’t be the most important selling point in purchasing your property it is at the top of the list for most people.