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Overseas Property
Investing Offshore - Why You Can't Afford Not to Act
Life is all about decisions and – more importantly – the timing of those decisions. Scott Picken, CEO of International Property Solutions (IPS) believes it is imperative to understand the opportunities available offshore in countries like Australia, and why it is so important to act quickly.
“At current exchange rates, a 4-bedroom house in Australia will cost minimum R700,000 (deposit and all costs included). But prospects for the rand remaining at current levels are uncertain,” comments Picken. “If the Rand were to lose just 10% against the Australian Dollar, this amount would increase by R70,000 or more.”
But Picken feels this could be a very conservative estimate and that we could be looking at a decrease in value of closer to 25% against the Aus Dollar. He bases this on several factors including how exposed the SA economy is reported to be, falling interest rates (which decrease the attractiveness of SA as a foreign investment destination) and both real and perceived political and economic implications of the imminent appointment of a new president. Picken says, “Exchange rate is something you can’t control and for those people who are waiting for the market to get better, I challenge them. What is there more chance of – the market decreasing by 10% in the next 6 months or the Rand devaluing by 10%?”
With the global village fast becoming a reality, Picken says it is important to diversify one’s asset base and take advantage of other markets. Investors worldwide are doing this in all asset classes. “South Africans live in a politically and economically challenging environment, and must be astute enough to invest part of their wealth in other, stable environments. This not only provides a Rand hedge, but acts as an insurance policy should you have to move,” he states.
Why not act now? IPS has already done the homework to help answer many of the questions or concerns that potential investors might have, such as which areas of Australia are best to invest in, how the management and maintenance of the property will be carried out, what to do if tenants default on rent, and how to handle interest rate increases. IPS works with strategic partners, Oz Invest, which provides a 10-year leaseback guarantee and provides solutions to all these concerns as part of the package, most importantly guaranteeing your income and fixing your mortgage costs. “What more could you ask for than a cashflow positive property with the variables fixed?”
”To optimise capital growth, you need to ensure you are investing in areas with the right fundamentals,” explains Picken. “It is important to invest in the right sector of the market and the best capital growth and rental yields are being found in the sub-$500 000 range, where IPS is focusing. IPS, with its partners and thorough market knowledge has already done over R1.5 million worth of research and sourced the best opportunities in Australia,” he adds.
Finally there are two very important things to consider. Firstly Picken says, “I think it is also important to understand how important this investment is to you and your families’ future. More than 90% of middle to upper income families in Argentina, Russia and Zimbabwe were directly and materially affected when their currency fluctuated. The only ones who didn’t were the prudent ones who had diversified their assets and invested offshore in other currencies.
Secondly, Picken says, “Before you invest there are 3 fundamentals which you should know and are essential. You should not invest without this knowledge. We will teach you these first.”
So, what is the next step for those who want to get moving? Come to the next IPS Australian Investment event – details on www.ipsivest.com l call 011 463 0588 for an appointment.
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