Investing in overseas property is more risky than investing in property in Australia.
It is much more difficult to make sure the investment suits your needs if you don't have local knowledge and you can't regularly inspect the property.
ASIC has received complaints about promoters who encourage Australians to invest in the United States property market.
If you've been 'invited' to invest in a supposedly 'cheap' overseas property, ask yourself why they need someone in Australia to invest?
Why aren't savvy locals investing?
Chances are it's a dud investment.
Here are some things to consider if you're thinking about investing in property overseas:
• Distance - Good tenants and good property managers are hard to manage when you're so far away from the property
• Renovations and repairs - Expensive renovations and repairs may be needed, especially if the property is prone to squatters and vandalism.
Buying property sight unseen is also a big risk.
• Hidden costs - You must factor in Australian tax laws, local property taxes, insurance, management costs, and ongoing repairs.
There are lots of hidden costs that the promoter may not tell you about.
• Exchange rate - Changes in the exchange rate could affect the amount of income you receive.
Tuesday, 5 March 2019