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Buy for the Income
Any global real estate investment portfolio should include at least one rental property. A rental investment won't make you rich, but it can provide solid, reliable returns. Your target for a net yield from a rental property investment should be 5 to 8 percent net per year. This is a reasonable expectation in a normal market, and, in the current investment climate, it's nothing to sneeze at. Identify a market where some distortion (because of undersupply, greater than historically typical demand, seriously undervalued purchase prices, or rising rents) is at work, and you can do better.
How do you get started building a portfolio of rental investments? Where should you be looking now to expand an existing portfolio? The surest bet is to target markets with proven tourist track records, places that attract visitors even when times are tough. Paris is the best example.
Second, consider inventory supply and demand. The Costa del Sol, for example, is ridiculously oversupplied.
Third, as with any real estate investment overseas, think through your exit strategy from the start. Even if your intention is to hold the rental long term, understand who your eventual buyer might be. You won't likely hold forever, and, regardless of your intended timeline until exit, it's a good idea to have an idea when going into any investment of whom you might sell to when you're ready to cash out.
The key consideration, though, when looking to buy to let overseas—and more important, ...
