Investing in real estate overseas, or purchasing big-ticket items like collectibles, helicopters and jets, and gems is a good way to strengthen your personal finances. To help you be certain that every forex investment will move you closer to overall investment success, we’ve compiled a list of helpful tips that you can use to reduce your risk.
Hire an Experienced Buyer’s Agent When Investing in Foreign Properties
Real estate investments can help you increase your wealth one property at a time, and investing in overseas properties allows you to tap into the many growing housing markets and expanding economies abroad.
Before buying real estate in another country, consider the outlook for the area’s economy, and analyse data on its rental prices and the property sales of the recent past. Tax implications and government regulations should also be considered, as they might challenge the viability of your investment.
Once you have found a market that you’re ready to invest in, hire an experienced buyer’s agent to represent you. The agent should have solid relationships with the top real estate agents in the area, and he or she should also be able to tell you about what’s going on within the local real estate industry, essentially giving you the inside scoop.
Having access to local insights and information will help you avoid a transaction that would end up being problematic in the long run, and you’ll also be able to choose the best locations to invest in when it’s the best time to buy. Plus, the right agent could also work on your behalf to negotiate with vendors, saving you even more money and time.
Know Your Country’s Tax Rules on Foreign Investments
If you are thinking about purchasing a property overseas, research what taxes you’ll need to pay on that real estate both abroad and at home. For example, you might find that you owe taxes to your home country when you send money overseas beyond a limit set by your government.
Some experts also recommend setting up a limited liability company (LLC) in the United States, a proprietary company in Australia, or a private limited company in the UK whenever you are ready to buy real estate overseas for investment purposes. Even though making a purchase as an individual is likely the easiest way to buy, you won’t have any liability protection. By purchasing through a business entity, your personal taxes will be filed separately and you will be able to protect your personal assets in the event of a dispute.
By gathering this information in advance, there won’t be any surprises, and you can get the highest return on your investment, particularly when you factor in currency exchange rates.
Use an Online Money Transfer Service to Send Your Funds Abroad
In order to buy a property or product overseas, you will need to transfer a large amount of money into a foreign bank account to make your down payment. If you fail to research foreign exchange rates, as well as the fees associated with converting your currency, you could end up spending thousands just to send your money abroad.
For any overseas investment, whether it involves purchasing real estate or a one-of-a-kind collectible, utilise an online transfer service like OFX to send your funds overseas at a more affordable rate. Exchange rates and fees can make an already pricey investment even more expensive, but with OFX, you can make single or recurring transfers quickly and securely.
You can also use OFX to make a purchase now but transfer your money later, thanks to the forward exchange contract. You’ll be able to lock in a rate and book transfers between two days and 12 months from today. In this way, there’s no need to worry about exchange rate movements.
If you are worried about exchange rates shifting and causing your price to increase before you’ve paid for your investment, you can use OFX to set a target rate for up to six months with the Limit Orders option. Set your rate 24 hours a day, 5 days a week so you can rest assured you won’t miss out on the rate if it’s reached overnight or while you’re busy. Transfers will be completed automatically once the target rate is triggered, making your forex investment when the rate is right.
Moving money internationally can cause headaches, but with the right transfer service, you can make the most of your investment. Whether you’re paying a one-time purchase fee, you’re paying in instalments, or you’re paying a mortgage, using a service like OFX will help you save money every time you have to send money overseas.
Tips for Investing in International Businesses
In addition to real estate and expensive goods, investors also look abroad to buy into international businesses and to receive a hefty return on their share of a growing company. This is another area in which foreign exchange rates need to be taken into consideration, though.
When you purchase shares in a company, you’ll need to use a currency converter to calculate just how much of that company you are really buying. And when you sell your shares to bring your profits home, you’ll also need to consider exchange rate fluctuations.
You may find that, despite making gains on a share in a company, you actually lose money because of an updated conversion rate. Therefore, the ultimate goal when investing in international businesses is to make the conversion work in your favour so you can earn an even higher return.
Go Overseas to Take Your Finances to the Next Level
Individuals who choose to invest overseas can diversify their financial portfolio and spread their risk over various markets and businesses both at home and abroad. They can also take advantage of growth potential offered by foreign economies in emerging markets. If you are ready to make some foreign investments, being aware of the risks and working with the right experts will help you achieve investment success.
IMPORTANT: The contents of this blog do not constitute financial advice and are provided for general information purposes only without taking into account the investment objectives, financial situation and particular needs of any particular person. OzForex Limited (trading as OFX) and its affiliated entities make no recommendation as to the merits of any financial strategy or product referred to in the blog. OFX makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this blog.