Investing in property abroad? Don’t forget about Exchange rates

Example blog post alt

More and more people are looking into investing in property abroad. The low, or non-exitant, interest rate in banks makes the majority of people wanting to invest their funds in other places, and overseas property, sometimes offering a 6-8% interest with rental (5% when you consider all direct costs), is a good alternative.

The majority of newcomer investors in property are from the UK. The British Pound has been climbing in comparison the Euro, US Dollar, and Australian Dollar, which made deals even more lucrative for them. In addition, the real estate market in the USA has suffered a serious beating in 2008, and still hasn’t reached its peak. Similar situations occur in Europe, where cities like Barcelona offer real estate which is 20-50% cheaper than counterpart cities in Europe. USA properties and Spanish properties have been increasing in value month-by-month since the 08 crisis (with the exception of some states and cities in the USA which don’t seem to recover).

Transfering Funds

One thing which investors, and especially the new ones, tend to forget, is the fact that a money transfer involving currency exchange can also be quite expensive. Regardless of the fixed fees, that don’t play much of a role in a transfer of tens or hundreds of thousands of Pounds, there’s an inherited mark-up in the exchange rates you are given. The Buy/Sell prices don’t represent the REAL intermarket rate, but the rate you are offered.

The markup banks take on an international transfer, in the UK, Europe, and in the USA, can sometimes reach unbelievable numbers. They can be as high as 2-2.5% when you’re talking about popular currencies, and sometimes as much as 6 or 8 per cent when you deal with exotic currencies. That is a PERCENT of the entire transaction amount. 6% of a $250,000 in Las Vegas, NV, amounts to $15,000 additional to pay.

This is why commerical FX companies are taking charge of things. People who need to transfer vast amounts of money from bank to bank use them to get better rates, as well as advisory services instructing clients on WHEN is the right time to transfer in order to “catch” the best rate. You can the leading companies that transfer funds to Australia using the following link:, and also get more information on what they do, and why is better than using your bank.

It’s sad to see a wasteful approach that does weigh in all the necessary factors, and especially from investors. You could compare it to someone who is depositing his funds into a savings account without checking the alternatives. Yes, buying a home abroad is a wise choice considering the current state of economy, and could pay off even if you overpay, but there’s no logical merit in doing so.