I received an email this morning from Gold N’ Silver Blog asking for advice on buying into international REITs.
Here’s the bulk of the message:
I’ve been looking for a fund to further
diversify my retirement portfolio. ( I am pretty well diversified in the US and
Foreign equity and bond funds.)I know we shouldn’t market time, and I am investing for the long term
(retirement). However, the int’l RE market did really well in 2006. Is it a
good time for me to invest $$ right now? ( I’m looking at the Fidelity Int’l
Real Estate Fund. )I guess my question is, do you expect a cool down in the int’l real estate
market?Anyone with thoughts or insight on this?
My Thoughts
It looks like green pastures to me. International governments, especially parts of the non-western world, continue to spend billions on infrastructure and real estate development projects, both residential and commercial.
In Canada, the Edmonton real estate market is up almost 48% in 2007. And in China alone, 300 million farmers are forecasted to move from rural farmlands into major Chinese urban cities in the next two decades. So there’s a great demand for prime real estate in both small and robust foreign countries.
International Real Estate should outperform Domestic US Real Estate as more foreign countries perform the arduous task of assessing the value of real estate properties. Many foreign nations lack the luxuries of real estate valuation tools like Zillow and full-time real estate assessors to determine fair market values. Lots of countries are in catch up mode.
Also, US and foreign investors are dumping billions of dollars into international REITs, which trade much differently than common stocks. International REITs may experience slower gains in the short term, but they are great long plays in my opinion.
Just plan your investment strategy, enter at a favorable price, and try to ignore short term market fluctuations.
Use automatic account builders to achieve a passive investment strategy. I recommend Fidelity’s if you’re looking for a broker.
What is your opinion on International REITs?
When will the International Real Estate Market Run End?
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I own RWX, it is too early to tell on their performance. But since I am an investor I take my chances. It is nothing wrong with international exposure in my portfolio. I love REITs and international REITS as well
Investing in international real estate market is definitely going to get you higher returns compared to US. In China and India, real-estate market has gone over the roof and there is still room for upward movement.
However investing directly into the emerging markets is easier said than done. REITs is the best way to go about it.
India has some excellent real estate based mutual funds that are worth looking into.
I think that the real estate funds are a really good option for someone, who cannot raise enough capital.But if you have money to invest, as a West Toronto Realtor I would recommend you to buy houses like an investment. Many of my clients are investing on real estate market.Important is, to choose a good building with potentially higher price, primarily, because buying houses is a long term investment.