The best way to diversify my portfolio with overseas investments

Diversification is an essential strategy for any investor looking to reduce risk and maximize returns. One way to diversify a portfolio is by investing in overseas property. However, investing in overseas property can be a complex process that requires careful consideration and planning.


There are a few things that we always recommend doing before looking into a new market. These are just light touchpoints but we go into a lot of detail over this and more in our flagship course, Fix and Flip Academy.


Now, it’s important to also state, there are many other complexities that you need to consider such as language barriers, currency and legal frameworks. Something we chat about in another blog.


Conduct Thorough Research

The first step in diversifying a portfolio with overseas property investments is to conduct thorough research. This includes researching different countries and regions, property markets, and potential risks and rewards. Investors should also research local laws, regulations, and tax implications to ensure compliance and avoid potential legal issues.


Choose the Right Location

Choosing the right location is crucial when investing in overseas property. Investors should consider factors such as political stability, economic conditions, and local property market trends. They should also consider factors such as language barriers, cultural differences, and the ease of doing business in the country.


Consider Different Types of Property

Investors should also consider different types of property when diversifying their portfolio with overseas property investments. This includes residential, commercial, and industrial properties. Each type of property comes with its own set of risks and rewards, so investors should consider their investment goals and risk tolerance when selecting a property type.


Hire a Local Property Manager

Investing in overseas property requires a significant amount of time and effort, especially when it comes to property management. Hiring a local property manager can help investors overcome language barriers, cultural differences, and legal issues. A local property manager can also provide valuable insights into the local property market and help investors make informed investment decisions.


Consider Exchange Rates

Exchange rates can significantly impact the return on investment when investing in overseas property. Investors should consider the potential impact of currency fluctuations and the cost of transferring funds when investing in foreign currency.


Seek Professional Advice

Investing in overseas property is a complex process that requires careful planning and execution. Seeking professional advice from a financial advisor, lawyer, or real estate agent can help investors make informed investment decisions and avoid potential pitfalls.


Diversifying a portfolio with overseas property investments requires careful consideration and planning. If you want to discuss this further and see how we can help you – set up a free chat with the team today.

Linz’s Musings – Sydney Property Investment Expo Wrap up

It was great to meet everyone that came down to the Sydney property Investment Expo last weekend, and there was lots of interest in the U.S. market as an option for strong, balanced portfolios.
While we were not the only international option at the Expo (anyone want a Dubai property? Entry costs only $850K USD but does give option to live there!) we were certainly popular with many investors not realising the U.S. market is an option or did not know its strengths.
One of the key focus areas right now, from talking to many investors at the Expo, seems to be cashflow.
Many investors are really hurting now with the meteoric rise in interest rates in Australia. While 3.85% is certainly not a ‘high’ rate, to have gone from virtually zero, to almost 4% in the space of 12 months is almost unheard of in pace.
AND, it appears the RBA will likely look to rise again next Tuesday…
Coupled with the false promise from the RBA back, not 2 years ago, that interest rates would not rise until at least 2024, here we are with round 11 rises in 12 months, and there still seems to be no respite for homeowners or investors alike.
Some investors took the RBA at its word and have purchased investments a little out of reach, or over leveraged, with the incredibly low rates at the time, which has now come back to bite.
Even the savvy investors, who may have had positive yield properties are now finding these properties moving into negative territory. Combined with possibly other negatively geared properties in the portfolios, many investors are finding they are also out of serviceability due to the cashflow impact, and therefore unable to refinance to a better rate, or interest only payments right now.
This is hurting.
While the past 3-5 years in Australia has all been about equity (how much is my portfolio worth; how much growth have I seen in my properties) the current economic investment climate is now all about CASHFLOW.
While I cannot see that properties here will not continue to rise, most economists are also suggesting the RBA isn’t done yet with rate rises either, so this may yet get worse before it gets better.
So, the answer?
It has become more and more imperative to ensure your portfolio is balanced with cashflowing properties as well as growth properties. The cashflow then allows for support to help fund the additional costs now seen on the growth properties, and/or possibly allows for higher serviceability to enable refinance of the growth properties to interest only payments for the short term to help offset the rising costs.
The U.S. market is one of the best options I have found for high cashflow rentals. Yields of over 10% net after costs, is common and multifamily properties can often even perform better.
With low entry costs, and high yields, to balance out an equity portfolio, the U.S. residential market is perfect.
Interested in looking at high yield, positive cashflow? Hit me up!

Common risks for Aussies investing in international property market

Diversification is a key to reducing your investment portfolio risk in the hopes of increasing your overall profits. It’s common for Australians to invest in the domestic market but the idea of international can often be daunting.


Investing in international property markets comes with unique risks that can affect the performance of an investment. Let’s explore some common risks that Australians should be aware of when investing in the international property market.

Currency Fluctuations

One of the most significant risks of investing in international property is currency fluctuations. When investing in foreign property, Australians must convert their money into the local currency of the country they are investing in. If the value of the Australian dollar decreases against the local currency, this can negatively affect the return on investment.


Legal and Regulatory Risks

Every country has its own legal and regulatory framework, which can differ significantly from those in Australia. This can make it challenging for Australians to understand and navigate the legal and regulatory requirements of investing in foreign property. Failure to comply with local regulations can result in fines or legal disputes that can negatively impact the investment.


Political Risk

Investing in foreign property also comes with political risks. Political instability or changes in government policies can impact property values, rental yields, and the overall performance of an investment. Australians investing in international property must keep a close eye on political developments in the countries they are investing in.


Market Volatility

Like any investment, international property values can fluctuate based on market conditions. Changes in supply and demand, interest rates, and economic conditions can all impact property values and rental yields. Australians must conduct thorough research and due diligence before investing in foreign property to understand market trends and potential risks.


Property Management Risks

Investing in international property also comes with property management risks. If the investor is not physically present in the country, they will need to rely on a property manager or agent to handle the day-to-day operations of the property. Finding a reliable property manager or agent can be challenging, and failure to do so can result in costly mistakes.


Cultural Differences

Investing in foreign property also means navigating cultural differences. This can include differences in language, customs, and business practices, which can make it challenging for Australians to negotiate deals or resolve disputes.


The U.S. property market is one of the best markets for Australian’s to venture into for many different reasons. If you would like to chat about this further and find out how to reduce your international investment risks – set up a free chat with us today.

Why the US is an easy market to invest in for Australians

Some may ask why we are so excited for fellow Australians to tap into the U.S. property market. Apart from my own shift from the Australian to the U.S. property market that has made such a difference to my life, it is also one of the best international markets to invest in without too much confusion.

Investing in the US market has become an increasingly popular option for Australians, and for good reason. With a stable political and economic environment, the U.S. is seen as a safe haven for investors looking to diversify their portfolio.

In this blog, we’ll explore some of the reasons why the U.S. market is an easy market to invest in for Australians.


Similar Language and Culture

One of the most significant advantages of investing in the U.S. market is that Australians already speak the same language and share many cultural similarities with Americans. This shared language and culture make it easier for Australians to understand the U.S. market and its nuances, which can help them make more informed investment decisions.


Accessible Market

The U.S. market is one of the most accessible markets in the world, with a plethora of investment opportunities available to investors of all sizes. This accessibility is thanks in part to the U.S.’s open economy and relatively low barriers to entry, which make it easy for Australian investors to invest in U.S.-based companies.


Strong Economy

The U.S. economy is one of the strongest in the world. The country is home to many of the world’s largest and most profitable companies, including Amazon, Apple, and Microsoft, all of which offer attractive investment opportunities. Additionally, the U.S. economy has a long track record of resilience, making it a stable and reliable market for investors.



Investing in the U.S. market allows Australian investors to diversify their portfolio, which can help to reduce overall investment risk. By investing in U.S.-based companies, Australians can spread their investments across a range of industries and sectors, which can help to protect against market volatility.


Strong Legal and Regulatory Framework

The U.S. has a strong legal and regulatory framework in place, which provides investors with a high level of protection. This framework includes regulations designed to promote transparency and prevent fraud, which can give investors peace of mind when investing in the U.S. market.


Easy Access to Information

Thanks to the internet and advancements in technology, it has never been easier for Australians to access information about the U.S. market. From financial news websites to online investment platforms, there are many resources available to help investors stay up to date with the latest market trends and developments.


If investing in the U.S. market is of interest, it might be worth having a chat with us. There are many different options available from completing your own course all the way through to having someone manage it.
What better way than to find out from us.

Set up a free chat today.

U.S. bank collapses and the impact on the property market for foreigners.

There’s been quite a bit happening in the last week in the U.S. financial markets with the 2nd largest banking collapse in the history of the U.S. – Silicon Valley Bank (SVB).


With around USD212 billion in assets and funds, SVB was the 16th largest bank in the States. As their name suggests, Silicon Valley Bank specifically targeted tech start-ups and the venture capital investors and firms that support these.


What happened with Silicon Valley Bank?

Silicon Valley Bank (SVB) was essential a bank targeting tech start-ups, and the venture capital investors that fund them.  The pandemic and particularly post pandemic period has been very tough on a lot of tech companies (particularly new start-ups) and crypto and we have seen both shares in these companies and crypto values plunge in the past 12 – 18 months.  This put a large strain on several tech companies who then needed to recall any cash reserves they may have had, and/or the investors invested in these start-ups try to recoup cash to cover expenses.

This left SVB with very low reserves, so the bank then went out to market to attempt to raise capital to boost reserves, which was unsuccessful.  This activity has spooked the market somewhat and started to create a ‘bank run’ on the bank.

What is a ‘bank run’?

Essentially a ‘bank run’ is when many customers all try to withdraw their funds within a short period of time.  Or, as possible in the case of SVB, even just a few customers withdrawing large amounts can be problematic.

Banks will generally only hold around 10% of deposited capital in liquid reserves, with the rest being lent out or used for investment returns as profits for the bank. This is how banks earn their profits.  By paying customers a small amount of interest on their deposit, they then use these funds for investments or loans and earn a higher rate, the difference being their profit margin.

What did the bank do?

With the capital raise unsuccessful, the only option SVB had left, was to sell a large number of 10-year Treasury bonds they had purchased as an investment.  For those that are not familiar with bonds, these are essentially IOUs purchased from the government or central bank.  They pay you a yield on each bond based on the current interest rate, for the term of the bond – generally 5-10 years, at which point the government buys them back.  Essentially lending money to the government for a fixed period at a fixed rate.  Generally, a safe investment…. right?

Issue was, the bonds they owned at pandemic interest rate levels of around 2%, are significantly lower than current bonds that can be purchased from the Fed at around 4%+ yields, so they needed to sell early at a greatly reduced price to entice buyers, hence realising a massive loss…

Shareholders and customers got wind of this, and a massive bank run ensued until the U.S. Government stepped in…


What is covered by the U.S. Government?


Small financial institutions in the U.S. are not necessarily covered by government regulations, but most reasonable sized banks that adhere to the federal banking regulations and have a reasonable credit rating, are.  The U.S. Government has what is called the Federal Deposit Insurance Commission scheme (FDIC). This guarantees all deposits in any bank with FDIC up to US$250,000 are safe.


What the government has also done is stepped in and said that they’re going to guarantee all funds and Silicon Valley Bank to all their deposits or the clients. Note: this does NOT cover the bank itself, or the shareholders/ bondholders of the bank.


What was the cause?


While the poor performance of tech shares, and crypto values of recent times certainly started the issues SVB had, their large exposure in Treasury bonds also is being looked at. Truthfully, such a large exposure in long term fixed bonds, ‘banking’ on the interest rates to stay low, was certainly a mistake.  Whether the bank had sufficient regulations in place to manage and monitor such a risky investment decision is being questioned, but likely all too little too late now.


The underlying current volatility in economic & financial markets globally is certainly putting a strain on the economy and that’s when we can start to see cracks appearing.  While I do not believe this is solely the cause for the failure of SVB, the strain of the current economic times has brought to head several questionable decisions made by the bank.



How does this impact the U.S. Residential market?


This has been no impact directly on the US. housing sector. With the bank being predominately a tech industry bank, it’s not likely to have an effect.  Most residential mortgages are held with large nationals, which, while not happy with the U.S. government tipping into the banking fund to bail out the bank, are largely unaffected.


One of the things that the U.S. Government or the Federal Reserve Bank may do though, is pause on interest rate rises. There’s a very good chance now that they may let the dust settle first before they look at any additional rises. There was forecasted a rise for March, which I believe is now unlikely.  Again, it may even change their entire policy moving forward altogether, although unlikely. A lot will depend on how much impact they see this collapse and the smaller banks also collapsing is having on the financial sector.



Where to from here?


All I can suggest is diversification  is probably one of the best things you can do. The adage – “Don’t have all your eggs in one basket” comes to mind.   This volatility is impacting global markets and even here in Oz, our housing market, rental market, job market is all affected.  Diversification is the best method of hedging against any market volatility.



I will certainly watch this space going forward and let you know any further developments.  If diversifying your property portfolio is something you are considering, or even looking at investing in property