You know, every investor is different: everyone knows their own financial situation and has different priorities in terms of timing, desired returns and investment stability or risk taking. In the various years of dialogue with our customers, we at OPISAS have given assistance to many investors on their path, listening to their different needs and proposing safe investments in overseas real estate. Often, among the requests submitted by customers, one of the most frequent concerns is about future generations: they are usually children or grandchildren and there is a need to build a solid investment plan that does not lead to a loss over the years. Many times we happen to talk with freshly new parents who are ahead of the times and who want to know the possibilities offered by the overseas real estate market to plan a concrete future and understand how to invest money in the best possible way.
Property investments overseas proof themselves correctly to long-term valuations. Thanks to their concreteness, they are in fact real houses, they offer the opportunity to reflect and plan future choices, as well as to be the real protagonists of investment decisions.
We analyze below 3 excellent reasons why a real estate investment overseas can be a good solution to leave something concrete for future generations and, above all, to make safe investments.
1 –Planning the Timeframe
An investment overseas, such as those proposed by OPISAS in the United States, allows you to act on different states, each with its own peculiar characteristics and its timing of achieving the maximum capital gains on the real estate value. The investor in possession of a capital to invest therefore has a certain flexibility in being able to choose the timeframe of his investment. The so-called "exit strategy", or the exit from the investment, is essential for making safe investments and can be planned from the start with the right precautions. Furthermore, it is often directly linked to the location where the purchase is made.
In the example of states that have international attraction, such as Florida, the increase in the value of real estate properties leased to the average American is certainly related to the reputation of the specific state worldwide. Since it is a market where investors come from all over the world, Florida has characteristics that lead to an increase in real estate value that tends to be faster than other states. An investment in Florida therefore responds to closer needs and satisfies the investor who wants to free up the capital in a shorter time frame, while always making safe investments.
On the other hand, investing in states such as Michigan, and to be specific in the city of Detroit, means investing in a metropolis that has undergone major redevelopment in recent years, where new services, major companies, institutes and organizations, etc. are continually emerging. The investor therefore has the opportunity to access real estate prices that are still accessible in the short term and to see his investment increase in value over the years, in conjunction with the growth of the area in which he has invested. In the hypothesis of new parents who want to understand how to invest money for the future of their children, an investment of this type represents a far-sighted and certainly intelligent choice, as, at the appropriate time, they will be able to resell the property and obtain a good capital gain, in addition to rental income coming in the years in which the asset was in the portfolio.
2 – Limited exposure to financial cycles
Very often, more experienced investors or those who rely on a professional in the field of wealth advice, choose to diversify their investments into multiple assets: these can be investors in the stock market, in government bonds, cryptocurrencies, start-ups, etc. In planning a self-respecting investment portfolio, however, the real estate asset is generally present, as it favors a limited exposure to financial cycles, stability over time and autonomy in the exit: these are factors that make it one among the most attractive safe investments, especially with a view to diversifying the allocation of invested capital.
More and more often, today, we are witnessing dizzying falls in the value of some assets, as well as rapidly rising peaks for other types of investments. These fluctuations, so called volatility, have brought disproportionate wealth to many investors, as well as huge losses for the most unfortunate. If we were to draw a graph relating to the fluctuations of the real estate market, we could instead represent it as a curve with less marked fluctuations, with very rare peaks and very spaced out over time. Often, in these cases, it was a question of rare convergences between various factors, as was the case, for example, for the "subprime crisis" in 2008. However, factors that the American system has corrected in a decisive and effective way. If you don't believe it, read our blog “Why US residential rentals will keep generating steady yields”.
It must be said that, as obvious as it may seem, properties represent a real asset, unlike the numbers that scroll across a screen. It is difficult for the value of the property to be completely and unpredictably reset as it happens for some securities. These factors make Real Estate one of the safest investments most chosen by investors.
We can therefore argue that any corrections in the real estate value of an area are usually less sudden than in other markets and therefore offer enough time to plan the next steps. The rent factor should also be emphasized: in some market niches, such as the one chosen by OPISAS, the rental yield presents interesting conditions and rents can increase in conjunction with the redevelopment of the area. In the event of a market settling, it may therefore be favorable to simply wait for the recovery, which in the US tends to be much closer and more consistent than other real estate markets, and in the meantime continue to receive rental income.
Investing in affordable housing already rented to the average American, in fact, unlike other alternative investments such as gold for example, gives the opportunity to enjoy not only the capital gain on resale, but also the rental income from the first day.
By choosing a property in areas inhabited mainly by tenants and where the demand for housing is always high, you also have the opportunity to enjoy stable income and to be able to minimize the risk represented by any market fluctuations.
The limited exposure to financial cycles is therefore a good reason to consider real estate as one of the safe investments to bequeath to their own children.
3 –Transparency, certainty, simplicity in investment management
When it comes to real estate investing, there are a few questions that may initially hold back an investor:
– How can I verify that the proposed numbers are real?
– Do I have to manage the property all by myself?
– What happens if a tenant doesn't pay?
If you decide to invest in US residential properties, the American economic-legal system allows you to respond positively to these questions already in the evaluation phase, or in the planning of an investment in line with your needs.
In the USA, for example, the Real Estate Cadaster is online and all data relating to the sale, rental and characteristics of the property can be checked in a simple and autonomous way.
On the issue of the fear of finding yourself alone having to manage all of this, the USA responded with the figure of the Property Manager, a specialist in the real estate field who has the task of replacing the owner in all the tasks related to the property and the tenant. Among his duties it is useful to mention, among others, the search for a financially suitable tenant, the control of the property, the verification of the payments of the utilities to be paid by the tenant, the notification to the owner of any situation relating to the property, ordinary or extraordinary, by issuing periodic reports. It is therefore clear that, for those who are thinking about how to invest money in a profitable and safe way, a figure of this type is fundamental and can protect the investor and assist him in any possible case.
The question of the eviction of a defaulting tenant is ultimately a fundamental element that makes an investment in US real estate one of the safe investments most appreciated by far-sighted and less risk-prone investors. The eviction process in the United States is in fact very quick and lasts an average of 34 days, allowing the owner to quickly return to possession of the property and reallocate it to another tenant. This is a key factor that distinguishes US real estate investments from those in other countries and contributes to the continuity of income.
In fact, remember that, it is undeniable, the factor that has the most weight in an investment is the income that the investment produces.
How much can the income on my property grow? A concrete case:
A good historical client of ours, father of a little daughter, like many entrepreneurs, in order to put into practice how to invest money at best thanks to diversification, in 2010 had seized the opportunity offered by the "subprime crisis" and had bought with us a property in Miami, Florida for only $ 85,000.
The investment remained in his portfolio for over ten years, constantly monitored by us and our experts. A few weeks ago, in fact, our team called him to inform him of the estimated value of his property at current market conditions. The client could not believe the great growth in the value of the property, which today reached over $ 177,000, thanks to the low supply of properties currently on the market, and immediately agreed to proceed with the resale of his property. In this case, that achieved was a capital gain of 108.5%, which allowed him to reallocate the capital taking care of the interests of his daughter, now a teenager.
We can therefore state that, for the three points listed above and on the basis of the experience of several of our clients, real estate investments overseas have always represented, and are reconfirmed, an excellent strategy for allocating one's capital to make safe investments. and to be able to plan a future for us and for future generations.
As with all the topics discussed in this blog, the advice is always to contact a professional in the field of safe investments in overseas real estate, able to support the individual investor and provide him with an overview of the various investment options.
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