First of all, even for the small amounts of assets, it’s not very logical to keep it all in the same pocket. Just in case of the possibility of something going wrong, it’s smarter to keep your belongings and assets in several different accounts, businesses, or properties. Yet, even if you work very hard to diversify their assets, keeping it all in one country negates all the effort.
Keeping all your investments in your home country means that in a possible political or economic problem in the country, your whole financial portfolio might get damaged. To prevent this danger, you can choose to diversify your assets internationally.
International Diversification of Assets is the Modern Popular Technique
It’s simply smarter to keep your wealth in several different countries in case something goes wrong. It’s always a possibility for things to go downhill. Especially in modern-day world and modern economics, things tend to change quickly. Since it’s not easy to always be in control of the dynamics of the modern economy, it’s easier to have one’s guard up.
It’s also undeniable that carrying your financial activities overseas grants the investor endless opportunities that you may not have in your home country. So, in addition to keeping your assets safe, diversifying internationally also provides you with new resources and opportunities.
As mentioned above, there are countless investment opportunities around the world. Therefore, it’s not easy for you to decide on where or what to invest in. A good option to start with is international real estate. It not only helps you to internationalize your finances, but it also offers plenty of other benefits. As it protects your wealth, it also may grant higher returns, better tax schemes, or even a second passport.
Possibility of Higher Returns
This is understandably one of the most popular reasons for buying international real estate. Most of the developed countries don’t offer huge returns from real estate investments. However, developing markets like Cambodia provide investors with great opportunities. Cambodia keeps sustaining its growth for a decade now and it’s likely to keep growing. Thus, if you choose to participate in Cambodia’s real estate market, it is more likely to get higher returns on your capital.
Protecting the Assets
As mentioned several times in this article, buying international real estate is a great way to protect your assets. Owning property abroad isolates you from the problems of your home country. Any instability or fiscal problem that might occur in the home country is blocked by the international real estate ownership.
Owning an international property means that the people filing suit against you must go through the jurisdictions of the foreign country. Therefore, investing in international real estate might protect you against judicial risks, too.
International Real Estate as Government Insurance
Issues like currency devaluation, trade wars, and political changes may make you nervous. So, it is always advantageous to make a transition into safer and more stable markets as an insurance policy against possible dangers.
Tax Advantages and Alternative Strategies
Owning international real estate makes you subjects of different tax regimes. So, it can also enhance your tax strategy regardless of your home country. With proper planning, many investors successfully reduce their tax rate significantly. To be a subject of a new country’s tax regime may prove to be drastically more profitable in terms of paying taxes. International real estate can therefore be an important component of your tax strategy.
Need more guidance on international real estate investment? Please check out our International Real Estate Investment article, too.