In baseball, a grand slam is the most potent move possible in a single play. It happens when a player hits a home run with the bases loaded, scoring four runs.
This is why I say owning foreign real estate is an international diversification grand slam. It accomplishes four key goals at once.
1. Move Savings and Wealth Abroad
Owning foreign real estate moves some of your savings and wealth offshore and out of your home government’s immediate reach. Unlike an intangible financial account, it is effectively impossible for your home country to seize foreign real estate at the drop of a hat. Doing so would likely take a literal act of war.
2. Create Other Internationalization Options
In most cases, owning real estate in a foreign country makes it much easier to open a financial account there. Without that entry ticket, many foreign financial institutions will show you the door, especially if you’re an American.
Buying foreign real estate usually gives you some sort of residency, sometimes a shortened path to citizenship, and in the case of one particular country, immediate citizenship and a coveted second passport with visa-free travel to over 100 countries, including the Schengen Area (26 European countries).
Owning foreign real estate also gives you a second home, a possible place to retire, and an emergency "bolt-hole" if there’s ever trouble in your home country.
3. Portfolio Diversification
Foreign real estate is a tangible hard asset with diversification benefits for a traditional portfolio of stocks, bonds, precious metals, etc. It has the potential for capital appreciation and the ability to generate rental income in a foreign currency.
4. Privacy and Tax Benefits
Owning foreign real estate is one of the very few ways that Americans can legally keep some of their money abroad while maintaining financial privacy.
If the foreign real estate is held directly in your name (i.e., not in a trust, LLC, real estate fund, partnership, etc.) it is not reportable.
In that sense, foreign real estate is the new Swiss bank account.
Additionally, certain expenses related to searching for, purchasing, and maintaining foreign real estate are tax deductible for Americans. As always, be sure to consult your tax professional.
Of course there are downsides to investing in foreign real estate, including paperwork, real estate’s illiquidity, carrying costs, and country/market specific risks. However, when you weigh those risks against the benefits, it’s clear that foreign real estate is one of the best routes to political diversification.
It’s never been more important to diversify than now.
Doug Casey, the original International Man, believes we’re approaching the eye of a financial hurricane. One that threatens to be far worse than 2008 and the Great Depression.
This is exactly why Doug and his team have put together a time-sensitive PDF guide explaining how it could all go down. Click here to download it now.
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