Dangers Of Investing Abroad

I have contemplated investing in property abroad many times.  Back in 2004 I was attracted to investing in both the Chinese market and Emerging Eastern European markets like Poland.  Part of me regrets not taking the plunge with the former because property prices in China have continued to boom and with the loan I would have taken on been denominated in US$ I would have also gained on the relative strength of the Chinese Renmimbi.  OH WELL!

The dangers of investing in property overseas

However investing overseas is a risky game think; of all those property investors that have brought holiday property in southern Europe such as Spain & Greece.  The other country I seriously considered was Poland.  To me the justification was clear.  A young and aspirational population with a growing economy at the heart of Europe.  Low prices and strong demand from workers returning from stints working abroad in places such as the UK.  However, it looks like the European crisis has even impacted on the Polish property market with house prices in Lodz plummeting by over 35% since 2008.

Investment lottery

The above example just highlights the risks and rewards of investing in property abroad.  Just as I could have made massive profits by investing in property in China equally I would have probably lost big time by buying Polish property.

Whilst the UK buy-to-let property market may not offer massive short term gains the downside risk is also relatively small at the present time.  I'm happy to be fully invested in the UK property market even if part of me wishes I'd taken a punt on the 'rise of the Dragon.'

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