In pictures: Tips on investing in real estate abroad
While a real estate boom in parts of the world attract some investors, others ask whether the risk is worth it. A couple of experts weigh in
Investors can look anywhere in the world to invest in real estate. If you decide to do so, what’s the best way to go about it? Frank Margani, executive vice-president of Fortress Real Developments, headquartered in Richmond Hill, Ont., suggests: “As a starting point, any investor should ask: Are you an active or a passive investor?” If you have a lower tolerance for risk, stick close to home, he suggests.
For those investors who can take on some risk, certain parts of the United States offer “fantastic opportunities,” Mr. Margani says. He cites U.S. regions where there is a strong national defence infrastructure – military bases, defence industries and all the services that go along with these. But, he cautions it requires “a high level of due diligence in those markets.”JONATHAN ERNST/Reuters
Further abroad, Mr. Margani says, there are opportunities in Brazil, for example, and even in recession-plagued Europe, industrial property in Germany has lots of potential upside.FABRIZIO BENSCH/Reuters
Himalaya Jain, director of Canadian equities at ScotiaMcLeod’s Portfolio Advisory Group in Toronto, suggests REITs are a reasonable way to invest in real estate. REITs tend to be solid, if unspectacular, in their growth because the real estate portfolios they own tend to be leased to tenants over the long term, he says.
One of the things to look at when investing in real estate, in any form, is the asset class, Mr. Jain says. For instance, many REITs focus on different types of property, such as retail, office or industrial space, or multi-family units (apartment buildings), seniors’ housing and lodging (hotels).Jacob Wackerhausen/Getty Images/iStockphoto
But for Canadian investors who want to stick close to what they know, Mr. Margani says that when investors from around the world look for the best real estate investments, they often turn to Canada. “We’ve got the G7’s lowest debt-to-GDP ratio, the safest banks and Canada has led the G7 countries in growth.”Adrian Wyld/The Canadian Press