Begin Your Global Investing Small

Making a real estate investment in a foreign country could easily become a “learning experience”. The profits could be enormous. That is because the risk can be enormous as well. The global financial crisis seems to be abating a little, so maybe it is time to get your feet wet. The trick is to get your feet wet without drowning.

There is an easy way to get started with a minimum of risk. Unfortunately the upside potential is less than an active real estate investment. The vehicle is foreign stocks. Almost all of the online brokerage houses has some type of “Global Account” where trades can be made in local exchanges and local currencies. After thoroughly researching some countries as if you were going to make a large investment there, choose your investment target country. This is the most important step.

Watch the market in that country or examine the historical data. There are two ways to go from here. The easy way is to buy an ETF (Exchange traded fund) or REIT (Real estate investment trust) that invests in that country. The second is to build and imaginary portfolio to practice investment skills. You could even do both. Buy the ETF or REIT and practice individual stocks until your imaginary portfolio outperforms the ETF. At that time it may be good to put your money into the portfolio that you handle yourself.

In many cases there will be foreign tax regimes to negotiate and emerging markets can be volatile. After a year or two, you should be familiar enough in the market to make a direct investment. You will have limited your loss to a predetermined amount.



David Segrest is an International REALTOR in Charlotte, NC. His email is david@segrestrealty.com , His webpage is http://davidsegrest.com , and his international real estate blog is http://dointernationalrealestate.blogspot.com/