While offshore property is a key part of portfolio diversification, as with any investment, expert advice is key. Here are seven principles that successful property investors employ.
1. Have a Strategy
Property is one part of a holistic, integrated financial planning model, so you need a clear plan to ensure you are working towards your short- and long-term investment goals and focusing on the end-result, be it a retirement nest egg, accommodation for college going kids or ongoing income. Are you planning to purchase one property or build a property portfolio? Keep in mind anything that can affect your investment over time, including mortgage costs, renovations, insurance, upkeep and income rental cash flow.
2. Consult the Professionals
Successful property investors often attribute part of their success to experts they have consulted. Finding, buying, financing and managing an international property portfolio is a massive undertaking. “It makes sense to engage the services of a proven, experienced and qualified property investment consultant who is familiar with the investment hotspots and can guide you through the paperwork and red tape, to help you grow your wealth safely and securely,” says Scott Irving, GM of Carrick Property. The costs associated with a financial planner, tax consultant, lawyer or property management specialist can be negligible when compared to the savings (time and money) they can bring.
3. Ask for Help
It may seem easy to manage your own property, but when you’re living across the ocean, it can become difficult to effectively oversee the day to day running of the property. This is especially the case if you have multiple properties. Consider outsourcing full rental management so that you have the right people on the ground taking care of daily issues and ensuring you have the right tenant profile.
4. Have Clear Investment Criteria
These are best drawn up in consultation with a wealth manager. What are you looking for in terms of your returns? What is your preferred length of investment? How much risk are you willing to take on? Where do you want to invest (and why)? Are you targeting commercial or residential real estate? The bottom line is your investment should meet your criteria – you should not be adjusting your criteria to fit an investment.
5. Do Due Diligence
Seasoned investors educate themselves and do research. While you may see the opportunities, have you considered the potential risks and received advice on how to minimise them? Know what you’re in for. Do due diligence on the market and the neighbourhood so that you know what you should be paying and what you could be selling for. Read up on property and consumer trends. Understand (or get advice if you don’t), the laws and regulations, and tax implications for the jurisdiction in which you are investing.
6. Keep Emotions at Bay
Separate emotions from your business decisions. An income-producing property is all about its value and its potential for gains and capital appreciation. Keep this is mind when choosing a property – it should not be an emotional purchase, like your home, unless you plan to live there in your retirement. Successful investors purchases based on facts and market knowledge – not on emotions.
7. Be Patient
There are no short-term gains in property. While it remains a solid asset class, you need to invest with the intention of keeping the property over the long-term in order to see price growth. As the Carrick Property team says, “It’s not about timing the market, but rather time in the market.” Also, wait for the right opportunity to present itself; don’t jump at the first property that comes your way.
