Real Estate Investments

Globalization has fundamentally changed the nature of real estate investments. Equity flows across markets have become the norm in a bid to reduce exposure to the recently volatile markets closer to home. Moreover, real estate investments in exotic locations have become fashionable. However conservative investors continue to favour real estate investments closer to home.

A report by Real Capital Analytics argues that the most salient feature in real estate investments overseas is a new level of transparency. Though there is still much to be desired, today’s overseas property investments are backed by access to far more reliable data sources. Emerging markets understand the need to regularize offshore real estate investments and consequently have improved in this regard. Finally it’s the lure of very high returns on real estate investments made in emerging markets, often in double digits that attracts the more adventurous investor.

Key advantages in keeping real estate investments closer home are as follows:

• Investors have more control of their investment
• Costs of real estate investments are lower because of good access to the property and the number of intermediaries in a transaction is reduced
• Management of real estate investments is easier
• Renovations and upgrades of real estate investments are more efficient
• Managing tenants and reducing periods of non-occupancy is simpler

The biggest advantage of real estate investments on home territory is the ability keep ones finger on the pulse of the market. Despite the advantage of modern technology, physical proximity to the market adds tremendously to the investors understanding of how best to exploit the latent opportunities of real estate investments.

Investors making their first foray into real estate investments are advised to start closer to home. With more experience in real estate investments they can get more creative and venture further away.