Are International Real Estate Investments Worth the Effort

Real estate investments can be used during periods of unstable interest rates, and can be a source of retirement income when started early. Developing countries can offer more benefits than domestic opportunities. As a professional with years of international real estate experience, Fahad Al Rajaan can offer consulting for developing Arab nations and Kuwait.

Regions outside of the United States

Investing in foreign real estate brings equal or greater benefits to you, compared to staying within the US. In addition to the tax advantages from the US, you can write off traveling expenses and there are countries with no property or capital gains taxes. Advances in technology have also facilitated international investments. The Internet has opened up fast communication channels: e-mail, video conferencing, and web sites with concise real estate information. These real estate websites provide key facts, multiple photos, and summary of each type of property.

Real Estate

Your selection of a sound real estate investment should include knowledge of the historical and current financial data. This data is available by many indexes that show price trends over time. Evidence shows that areas with strong markets include Europe, tropical regions, and the Middle East. France, Spain, and Italy are prominent countries for real estate. Housing in Barcelona and the French Riviera has recently become a strong investment, as well as Italian properties in cities such as Tuscany and Liguria. The countries of Grenada, Mauritius, and Brazil border picturesque beaches and offer prospects as developing countries. The United Arab Emirates and Kuwait, along the Persian Gulf, stand out as successful examples. Dubai is noted for the largest, tallest, and biggest real estate in the world, and real estate is one of the highest contributors to its economic growth. Kuwaiti institutions have a historical reputation, dating as far back as the 1950’s. The Public Institute for Social Security (PIFSS) is no exception, as a sovereign wealth fund, with a strong history dating from the mid-1970s. Sovereign wealth funds are state-owned, but invest globally in variety of assets.

Kuwait as a retirement investment

Kuwait has a history of economic stability in relation to your retirement. Its stock exchange dates back over 50 years, and it is regarded as one of the most stable markets in the Middle East by FTSE International. In 2014 it reached its lowest debt to GDP ratio in over 20 years, a consistent downward trend since 1991. As a Middle Eastern country, the oil revenues are a large component of stability, producing over 60% of the GDP.

Faha Al Rajaan director at PIFSS is also a chairman of two major real estate investment companies in Kuwait. These companies are Wafra, a real estate investor of PIFSS, and the Kuwait Real Estate Investment Consortium (KREIC). The KREIC invests in real estate in Middle Eastern areas both within and outside of Kuwait. To illustrate the potential of Wafra and KREIC, PIFSS is ranked among the top 20 world sovereign pension funds. In relation to KREIC, increased real estate prices are projected from a growing middle class income in Kuwait.