US investors like real estate assets and they are constantly looking for new markets and new opportunities.
I addition, there is a considerable market for US retirees, who can stretch their dollar further and have better living conditions in other countries, prefer warmer climates or would like to share their retirement years between US and a completely different culture.
How to invest in real estate globally
Individual Investing
Buying a rental or second home property abroad could have its merits, especially if you are doing the research ahead of time and have the right connections in that respective country. Before you invest, find out all you can about that country politics, laws, customs, taxation for US citizens, values, appreciation, resale and more.
The same principles when looking to buy a commercial real estate property in a foreign country. Typically, there is a lot more information available about commercial real estate and their asset performance than about the residential market, which might not be well documented and quantifiable in some countries. The commercial real estate is a clear indicator of the overall economic health and its tied to employment data and companies performance.
REIT – Real Estate Investment Trusts
A REIT is a company that owns, operates or finances income-producing real estate, modeled after mutual funds. REITs provide all investors the chance to own real estate, present the opportunity and to access dividend-based income and total returns.
Most REITs operate along a straightforward and easily understandable business model: By leasing space and collecting rent on its real estate, the company generates income which is then paid out to shareholders in the form of dividends. REITs must pay out at least 90 percent of their taxable income to shareholders—and most pay out 100 percent.
REIT-owned real estate, located in every state, is an important part of the U.S. economy and local communities.
Types of REITs: | |
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Equity REITs | The majority of REITs are publicly traded equity REITs. Equity REITs own or operate income-producing real estate. |
Mortgage REITs | mREITs provide financing for income-producing real estate by purchasing or originating mortgages and mortgage-backed securities and earning income from the interest on these investments. |
Public Non-listed REITs | PNLRs are registered with the SEC but do not trade on national stock exchanges. |
Private REITs | Private REITs are offerings that are exempt from SEC registration and whose shares do not trade on national stock exchanges. |