Learning anything – from walking to making money – is a process of trial and error, so wouldn’t you prefer to cut out some of those errors and get straight to the lesson? You have come to the right place. Here are some lessons you can learn without having to make the mistakes first.
It’s all about the people
No matter what shiny, new development you are yearning to invest in, you need to make sure you have the right people to support and guide you, especially if you are investing offshore. You may know everything about investing at home – you can recite every bylaw that applies to property usage and zoning – but when you leave the safety of your homeland, make sure you have partners who are trustworthy and actually know what they claim to know.
Play the long game
Investing in property offshore is not a get-rich-quick scheme. You need to take at least a five-year view, a big reason for this is our highly volatile rand, which is much rougher in the short term, but will cancel out in the longer term. Essentially, anything shorter than five years is not different to gambling.
Information is power
Get your hands on the right information – information that reflects what is really going on. The property you are planning to buy is going for a song, what’s the catch? It’s located next door to a condemned building filled with squatters or the strip mall that a super-salesman has been telling you about is miles from anywhere and most of the shops are empty. Getting the right information relates back to having the right partners, people you can rely on and who will tell you what you need to know – not only what they need you to know.
Compare apples with apples, always
Take a good look at how tax, structuring and compliance will affect your investment, so you can make a useful comparison of what will be a better deal.
The currency factor
When you invest offshore, you need to take the exchange rate into account – the deal may not be fabulous, but if the rand is under pressure, then you can benefit. In fact, even if you lose percentage points on the property, you will get support from the weaker rand. Again, this works best when you have a five-year view. While the property is earning income and you are getting good returns on your rand investment, stay put, as it is based on long-term trends and fundamentals.
It’s not about you
When it comes to the décor choices of the property you invest in, remember it’s not about you – it’s about the tenants. If the tenants you are targeting want small kitchens and tiled bedrooms, then give them what they want. If you have bought a property as an investment, it doesn’t matter if it is not to your taste, as long as the tenants like it.
Income is where it’s at
Keep your focus on the income, not the growth, and you are on track to survive dips in the market. You lose money in property when you sell in a panic. If you have a good stream of income because you focused on the investment fundamentals, then you sell only when the time and price is right for you.
A team event
Crowdfunding allows you to raise money with the help of others – you can raise $10 million by getting $100 from 100,000 people rather than getting the whole amount from one source (typically a bank). Online platform Wealth Migrate, for example, offers this as a way to invest in international property.
Pay it forward
People are living much longer – celebrating your 100th birthday is no longer a rare event. Take the time to accumulate first-world assets and income, which makes you a global citizen, and the world is your oyster. What you put in place today can pay huge dividends one day when you want to retire.
Now, take these lessons and use them to take charge of your future.