Recently, a report mentioned that foreign investments in commercial real estate in the US touched a record $38.7 billion in 2013. Chinese companies alone invested about $14 billion in the US last year. This year, Jones Lang LaSalle (JLL) forecasts foreign investment into the US to touch $50 billion.

Similarly, Asian investors are equally keen on purchasing apartment buildings in the US. The cities favored by these investors include San Francisco, Los Angeles and New York. In the first eight months of 2014, these investors have purchased multifamily properties worth $522 million. In 2012 and 2013, the numbers stood at $356 million and $537 million respectively.

Which Countries Provide the Best Prospects for Real Estate Investments At Present?

However, the reverse trend is apparent too. Many Americans are also looking to invest in real estate in other countries. Elvis Picardo analyzed data from the International Monetary Fund (IMF) published in the “Global Housing Watch” of October 2014. He reports that the best countries for investing in real estate include:

• Estonia (with housing prices up by nearly 16 percent annualized in Q1, 2014)
• Ireland (with housing prices up by nine percent annualized in Q2, 2014)
• The United Kingdom (with housing prices up by eight percent annualized in Q2, 2014)
• Australia (with housing prices up by seven percent annualized in Q2, 2014) and,
• Iceland and Turkey (with housing prices up by nearly seven percent annualized in Q1, 2014)

Why Are Americans Increasingly Looking at Investing their Money in Real Estate Abroad?

Overseas real estate investments do not bear any semblance to investing in stocks. For example, you do not purchase property overseas and then wait for its value to appreciate. Instead, you focus on managing your investment actively. This might involve making several trips to the area and setting up an infrastructure of support on the ground.

Many Americans have long looked at places like Costa Rica, Panama etc. as places for spending their retirement years. However, with the appreciating value of the greenback, people are also looking at investing in real estate overseas for several reasons. Some of these reasons include:

• Opening the doors for foreign residency, which might enable them to apply for a residency visa

• Purchasing a second home that is more affordable overseas than it is locally – whether for their retirement years or for a holiday

• Retiring abroad, often in countries that have relatively low costs of living

• Deriving benefits from a truly diverse investment portfolio

• Benefiting from a diversity in currencies, instead of depending solely on the US dollar

• Enjoying a rich cultural experience in a different land

• Earning a rental income from overseas by giving the property on lease

• Enjoying the benefits that accrue from having a hard asset, which offers better security as an investment

• Deriving profits from investing in farmland, which given the shrinking levels of available farmland, could be worthwhile in the years to come

• Building a stash of funds overseas, as they do not need to report these assets to the Internal Revenue Service (IRS)

• Benefiting from various tax advantages, such as deductions on their tax returns

However, before you invest your hard-earned money into purchasing real estate overseas, ensure that you carry out the due diligence necessary. Managing an overseas real estate investment is not easy. Therefore, secure the appropriate legal assistance and safeguard your investment.