For many people around the world dreams have turned into nightmares. For others the nightmares can make the dreams come true. Buying a property at foreclosure or short sale in the USA is tough. In many places the complications make it nearly impossible. These are not the only properties that can be bought at a discount.
Many developers are holding land and can no longer get the financing to build the property out. Many other developers have properties that are built out and just sitting in inventory. These are opportunities for people with cash or access to financing. The dollar for some strange reason is in an advantageous position in reference to many currencies. This is a situation that cannot last. The perception is now, that no matter how bad things are in the USA at least the government is stable.
As other countries stabilize more, their currencies will rise. The people who buy now with valuable dollars, will have stronger currencies in the future to convert back to dollars. This means the profit on their investments will be multiplied.
David Segrest is a REALTOR® in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com He is also a contributor on Argentina to: http://realestatebloginternational.com/
Showing posts with label Currency Trends. Show all posts
Showing posts with label Currency Trends. Show all posts
Thursday, July 1, 2010
Saturday, February 9, 2008
Dominos
Dominos
The domino theory is at work twice in the international real estate business. The classic domino theory (as used to justify Viet Nam) is a bunch of dominos standing up. One gets pushed down and the rest are knocked down in order. That theory is being demonstrated right now as the rest of the world reacts to the recession (there, I said it) in the USA. As the stock market here palpitates and makes waves around the world, investors must be finding good old dull real estate more and more attractive. The worldwide commercial real estate market is still strong. http://www.nnnex.com/news/
The game of dominos we played as kids is a little different. Do people still play dominos? The numbers on the dominos have to be matched up end to end. This is similar to international real estate investing. The currency trends need to be matched to the yield and risk rates of the property itself. There are actually two possible matches for each set of numbers, depending on the investors perspective.
When one economy has a strengthing trend against the other, currency profits can be made in addition to the real estate profits. The converse is also true. If the currency of the target market weakens against the home country of the investor the losses can wipe out any profits from the investment.
Currency differences also make bargain opportunities. People in the Americas bought European properties when the Euro was worth $.83. They did very well. Now Europeans are buying American properties and taking advantage of the strong Euro and the strong Pound Sterling. The jury is still out on how well they will do. Anyone for a game of dominos?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
The domino theory is at work twice in the international real estate business. The classic domino theory (as used to justify Viet Nam) is a bunch of dominos standing up. One gets pushed down and the rest are knocked down in order. That theory is being demonstrated right now as the rest of the world reacts to the recession (there, I said it) in the USA. As the stock market here palpitates and makes waves around the world, investors must be finding good old dull real estate more and more attractive. The worldwide commercial real estate market is still strong. http://www.nnnex.com/news/
The game of dominos we played as kids is a little different. Do people still play dominos? The numbers on the dominos have to be matched up end to end. This is similar to international real estate investing. The currency trends need to be matched to the yield and risk rates of the property itself. There are actually two possible matches for each set of numbers, depending on the investors perspective.
When one economy has a strengthing trend against the other, currency profits can be made in addition to the real estate profits. The converse is also true. If the currency of the target market weakens against the home country of the investor the losses can wipe out any profits from the investment.
Currency differences also make bargain opportunities. People in the Americas bought European properties when the Euro was worth $.83. They did very well. Now Europeans are buying American properties and taking advantage of the strong Euro and the strong Pound Sterling. The jury is still out on how well they will do. Anyone for a game of dominos?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Monday, December 31, 2007
Why Asians & Europeans Should Buy in South America
Why Asians & Europeans Should buy in South America
The biggest reason is the currency differences. South American Currencies are like the dollar in that they have been steadily losing value against other world currencies. Some of the currencies are undervalued. The Argentine Peso is 3.16 to the US dollar, which is pretty good. Most of the property there is priced in dollars though so that doesn’t really help some of from the USA. The dollar is 1.47 to the Euro. A European can get a significant advantage. The yen is 112.32 to the dollar, which is not all that great. The Yuan or RNB from China is 7.31. The Chinese have been accused ot keeping their currency artificially low; but considering recent events, that may not be the case any longer. Europeans will be the big winner on currencies, at least in the short term.
The next big reason is the things that are happenning to many of the South American Economies right now. They are shifting from commodities based economies to industrial and service based economies. Investing in South America now, with the exception of Bolivia, Venezuela and Ecuador, is like investing in the USA 150 years ago. The big difference being that they will probably compress 150 years of development into about 20.
The third reason is the agricultural potential. The coffee business has been hijacked by the Africans and Vietnamese. Soybeans, exotic herbs and fruits, ethanol and vegetables are the new order. The big users of these things are in the Northern hemisphere. When winter stops production in the North, summer prevails in the South.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
The biggest reason is the currency differences. South American Currencies are like the dollar in that they have been steadily losing value against other world currencies. Some of the currencies are undervalued. The Argentine Peso is 3.16 to the US dollar, which is pretty good. Most of the property there is priced in dollars though so that doesn’t really help some of from the USA. The dollar is 1.47 to the Euro. A European can get a significant advantage. The yen is 112.32 to the dollar, which is not all that great. The Yuan or RNB from China is 7.31. The Chinese have been accused ot keeping their currency artificially low; but considering recent events, that may not be the case any longer. Europeans will be the big winner on currencies, at least in the short term.
The next big reason is the things that are happenning to many of the South American Economies right now. They are shifting from commodities based economies to industrial and service based economies. Investing in South America now, with the exception of Bolivia, Venezuela and Ecuador, is like investing in the USA 150 years ago. The big difference being that they will probably compress 150 years of development into about 20.
The third reason is the agricultural potential. The coffee business has been hijacked by the Africans and Vietnamese. Soybeans, exotic herbs and fruits, ethanol and vegetables are the new order. The big users of these things are in the Northern hemisphere. When winter stops production in the North, summer prevails in the South.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Sunday, October 7, 2007
Currency Trends, Good or Bad
Currency Trends, Good or Bad.
When I studied the trend between the USA dollar and the Argentine peso a couple of months ago, I was amazed that the peso had held its own against the dollar for several years. No more. When I checked the peso for my trip to Argentina, I was happy to see that it was at about 3.19. Sad for Argentina. Great for me. I need new shoes and Argentina and Uruguay make the best.
I say sad for Argentina; but is it? I will probably buy 2 pair of shoes instead of one. Maybe my wife will get a new pocketbook. The pesos will still pay the workers and buy the leather and keep up the location for the shoemaker just like before. Only if he wished to buy something imported will he be worse off. Even then because of the extra business, he may have more pesos.
My wife and I went to Buenos Aires back when the peso was tied to the dollar. The stores were full of merchandise. Everything was incredibly expensive and nobody was buying. Argentina is basically a commodities based economy. Economy prices were down so nobody had much money. Now the peso reflects the economy of the country and the prices of the commodities. The people’s income will not change in pesos. Financial misery will be avoided.
Tomorrow I will report on conditions on the street in Buenos Aires.
David Segrest is a REALTOR with Segrest International REALTORS. His webpage is http://www.segrestrealty.com/
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When I studied the trend between the USA dollar and the Argentine peso a couple of months ago, I was amazed that the peso had held its own against the dollar for several years. No more. When I checked the peso for my trip to Argentina, I was happy to see that it was at about 3.19. Sad for Argentina. Great for me. I need new shoes and Argentina and Uruguay make the best.
I say sad for Argentina; but is it? I will probably buy 2 pair of shoes instead of one. Maybe my wife will get a new pocketbook. The pesos will still pay the workers and buy the leather and keep up the location for the shoemaker just like before. Only if he wished to buy something imported will he be worse off. Even then because of the extra business, he may have more pesos.
My wife and I went to Buenos Aires back when the peso was tied to the dollar. The stores were full of merchandise. Everything was incredibly expensive and nobody was buying. Argentina is basically a commodities based economy. Economy prices were down so nobody had much money. Now the peso reflects the economy of the country and the prices of the commodities. The people’s income will not change in pesos. Financial misery will be avoided.
Tomorrow I will report on conditions on the street in Buenos Aires.
David Segrest is a REALTOR with Segrest International REALTORS. His webpage is http://www.segrestrealty.com/
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Sunday, July 15, 2007
Currency issues for expats
Currency issues for Expatriates
People who live and work abroad
People leave their own countries to work for various reasons. This reason sometimes has a lot of influence on the way currency fluctuations affect them. There are three basic types of people working abroad. One group works for a company in their home country and is sent overseas for a long or short-term assignment. Some people work for a foreign company in the home country of their employer. Another group works for a foreign company in a country outside of the company’s home country. The ongoing obligations of the expatriate in the home country can be harmed by a negative trend in the currency of their remuneration. A positive trend may be helpful.
Sometimes expatriates are paid in the currency of their home country. In that case a negative trend of the host country could be beneficial and a positive trend could be harmful.
Some people work abroad as a way to subsidize international travel. Teaching English is a popular job for people from the USA, Great Britain, Australia, South Africa and other English speaking countries. The pay is low; but fluency in the foreign language is usually not required and living expenses are usually covered. Working with churches or international aid organizations is also popular.
Often the people who take these jobs are young people or retired people and are able to leave home with very minimal financial responsibility. One thing that makes this type of job attractive is that it affords an opportunity to interact with the local people and build relationships. The access granted is much different that the access given to a tourist.
When working abroad the employee has to deal with tax issues as well as currency issues. A person interested in taking advantage of this option should carefully research the full economic impact. A good starting place is to find and read the tax treaties between the two countries. Often, spending more than a certain number of days in a country will cause the expatriates worldwide income to be subject to tax in more than one country.
There are many other issues to consider when looking for employment abroad. These will be discussed in depth in the week beginning July 23rd. The next column will discuss economic issues other than currency.
David Segrest is a REALTOR in Charlotte, NC
David S. Segrest, CIPS, CCIM, TRC, CEA
david@segrestrealty.com
http://www.segrestrealty.com
Serving the world in the Carolinas, Serving the Carolinas in the World
People who live and work abroad
People leave their own countries to work for various reasons. This reason sometimes has a lot of influence on the way currency fluctuations affect them. There are three basic types of people working abroad. One group works for a company in their home country and is sent overseas for a long or short-term assignment. Some people work for a foreign company in the home country of their employer. Another group works for a foreign company in a country outside of the company’s home country. The ongoing obligations of the expatriate in the home country can be harmed by a negative trend in the currency of their remuneration. A positive trend may be helpful.
Sometimes expatriates are paid in the currency of their home country. In that case a negative trend of the host country could be beneficial and a positive trend could be harmful.
Some people work abroad as a way to subsidize international travel. Teaching English is a popular job for people from the USA, Great Britain, Australia, South Africa and other English speaking countries. The pay is low; but fluency in the foreign language is usually not required and living expenses are usually covered. Working with churches or international aid organizations is also popular.
Often the people who take these jobs are young people or retired people and are able to leave home with very minimal financial responsibility. One thing that makes this type of job attractive is that it affords an opportunity to interact with the local people and build relationships. The access granted is much different that the access given to a tourist.
When working abroad the employee has to deal with tax issues as well as currency issues. A person interested in taking advantage of this option should carefully research the full economic impact. A good starting place is to find and read the tax treaties between the two countries. Often, spending more than a certain number of days in a country will cause the expatriates worldwide income to be subject to tax in more than one country.
There are many other issues to consider when looking for employment abroad. These will be discussed in depth in the week beginning July 23rd. The next column will discuss economic issues other than currency.
David Segrest is a REALTOR in Charlotte, NC
David S. Segrest, CIPS, CCIM, TRC, CEA
david@segrestrealty.com
http://www.segrestrealty.com
Serving the world in the Carolinas, Serving the Carolinas in the World
Wednesday, July 11, 2007
Investors and Currency Trends
Investors and Currency Trends
In currency as well as in stock prices, the old adage “The trend is your friend”, is very applicable. Currency risk can be planned for by examining the trends. In the chart from the last blog, the trends of the different currencies show a definite pattern in a certain direction. In one instance between the Argentine peso and the other currencies there is a huge differential. It is imperative that when using trends to make investment projections, any “blips” like this must be studied to find underlying causes.
In this particular case, the peso had been pegged to the US$; and the peg had been dropped because of an economic crisis in Argentina. Many times when there are large fluctuations of this nature a longer term trend can be examined to get a better understanding. That would not be helpful in this instance because the peso had been pegged to the dollar and the old data would only show a level relationship. In general, investors like to see the currency of the target investment country improve against their own currency. This means that the return on their investment will increase because of the currency trend. The exception might be a highly leveraged investment in which the mortgage is denominated in the target countries currency. Any negative cash flows would result in a higher cost for the investor as the deficits were covered from the home country.
A really great example of currency trends causing problems for investors is Hawaii in the ‘80s. The Japanese were able to borrow money in Japan very cheaply. They borrowed money to buy hotels in Hawaii at a very low yield and a very high loan to value ration (LTV). As the yen increased in value against the dollar and the yield from the hotels dropped, repaying the debt on the mortgages became increasingly difficult. Not only were the individual investors harmed, the entire Japanese banking system suffered. The Japanese banking system is enduring upheavals today as a result of these old problems. The next blog will deal with currency trends and retirees.
David Segrest is a REALTOR in Charlotte, NC
David S. Segrest, CIPS, CCIM, TRC, CEA
david@segrestrealty.com
http://www.segrestrealty.com
Serving the world in the Carolinas, Serving the Carolinas in the World
In currency as well as in stock prices, the old adage “The trend is your friend”, is very applicable. Currency risk can be planned for by examining the trends. In the chart from the last blog, the trends of the different currencies show a definite pattern in a certain direction. In one instance between the Argentine peso and the other currencies there is a huge differential. It is imperative that when using trends to make investment projections, any “blips” like this must be studied to find underlying causes.
In this particular case, the peso had been pegged to the US$; and the peg had been dropped because of an economic crisis in Argentina. Many times when there are large fluctuations of this nature a longer term trend can be examined to get a better understanding. That would not be helpful in this instance because the peso had been pegged to the dollar and the old data would only show a level relationship. In general, investors like to see the currency of the target investment country improve against their own currency. This means that the return on their investment will increase because of the currency trend. The exception might be a highly leveraged investment in which the mortgage is denominated in the target countries currency. Any negative cash flows would result in a higher cost for the investor as the deficits were covered from the home country.
A really great example of currency trends causing problems for investors is Hawaii in the ‘80s. The Japanese were able to borrow money in Japan very cheaply. They borrowed money to buy hotels in Hawaii at a very low yield and a very high loan to value ration (LTV). As the yen increased in value against the dollar and the yield from the hotels dropped, repaying the debt on the mortgages became increasingly difficult. Not only were the individual investors harmed, the entire Japanese banking system suffered. The Japanese banking system is enduring upheavals today as a result of these old problems. The next blog will deal with currency trends and retirees.
David Segrest is a REALTOR in Charlotte, NC
David S. Segrest, CIPS, CCIM, TRC, CEA
david@segrestrealty.com
http://www.segrestrealty.com
Serving the world in the Carolinas, Serving the Carolinas in the World
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