Question

Elaborate on the benefits and potential pitfalls of international real estate investment. What factors contribute to earnings volatility for international property and how might these factors best be averted?

Answer 1

The following are the benfits of international real estate investments -

1. It will generate continous passive income.

2. It will prove to be good long term investment if the value increases over time.

3. It will be a diversification in the portfolio of real estate investment leading to a global edge.

4. Risk of fluctuation in real estate market will be mitigated.

However following are the disadvantages of international real estate investments.

1. In case of emergency requirements of funds, it will become difficult to find the prospective buyer in an international market.

2. Investor will have to comply with the tax laws of international country thus increasing the tax compliance.

3. It will lead to currency risk.

4. Real estate laws of foriegn country is also to be complied with.

These factors can be best averted if the person makes investment in home country itself, or by making investment in some other feild.

Please rate the answer!

Thank you!