How to succeed by investing abroad: Before making any investment it is important to do your homework. As with other type of investments, those who study the subject and understand more, increase their chances of achieving an excess return on the market. In this review, we will explain why it is worth investing abroad and the reasons why so many Israelis prefer this option.
Yields of Real Estate Investments Abroad as Compared to in Israel
The reason it is so easy for investors to understand the value of investing in real estate abroad is the return. This is not the only reason and there are quite a few others, such as the easing of capital gains taxation (the essence of which is similar to the Appreciation Tax in Israel). And yet, it is important to point out the huge differences between the possible returns for real estate investors in Israel compared to investing abroad. In Israel, the average yields for investment in a residential income-producing property currently stands at a minimum of 1 or 1.5 percent up to 2 or a maximum of 3 percent per year. Abroad, the return is 3 and even 4 times these figures, all depending on the destination country and making the right choice of property or project in which to invest. So abroad, it is possible to reach a two-digit return of 10 or even 12 percent. In Israel, it is impossible to even dream of such numbers. Not today and not in the years to come.
Investment Property Costs Abroad
At the price of investing in one property in Israel, it is possible to invest in several different properties abroad. This has some implications that are worth noting. First, an investor who does not have the ability to invest in a property in Israel, has the option to buy a property abroad easily. By and large, it is really not unreasonable to purchase 4 properties in a good area abroad, at the price of one property in a reasonable area in Israel. Second, investment diversification can be done easily. Instead of buying one property in Israel in a location that may turn out to be not so successful after a while, you can invest abroad and buy several properties in diverse areas or environments. This greatly increases the chance that the entire investment will yield even more returns than expected.
Opportunity to Profit from Excess Growth of Developing Economies
Real estate investors can maximize (increase) the value of their investment by choosing developing countries. In Israel, although the economic growth of recent years is quite good, it is still not the same as the growth and potential of some of the economies overseas. When focusing on these markets, for example in some Eastern European countries, such as Georgia, the differences are evident. One can see that the potential is just beginning, with opportunities for above average growth that cannot be found in a highly developed country, such as Western countries.
Wide and Varied Range of Properties
When you look at the possibilities abroad, a very clear picture of abundance emerges. That is, there are a great many choices, among a variety of different properties. There are properties in large and central cities, where you will find tourism and economic and commercial centers alongside properties in port cities that are also hubs of very rapid development. Compared to investment options in Israel, abroad you can find many more options inside or outside the big cities; more properties designed, for example, for students; commercial buildings; a variety of private homes or residential buildings and business properties. A more diverse construction standard allows everyone to choose the investment profile that interests them most.
Diversifying an investment portfolio in a real estate asset in a different geopolitical environment
Investing in real estate abroad can be very suitable for the purpose of diversifying investments, both for people who believe in the capital market and for people who also have real estate assets in Israel. It is always a good idea to diversify investments and hold assets even in a different geopolitical environment.
In conclusion, at the price of a property in Israel, several properties can be purchased abroad. The increase in the value of the property and the current return far exceed those we know from the current Israeli reality.
