Investing Fundamentals

Don’t Invest In These Overseas Properties

Buying property overseas is a great way to reliably increase profits over the long term.

It diversifies your portfolio and lowers your investment risk. It can offer a reliable Plan B, too.

But not all types of overseas property are created equal. Some are investment disasters waiting to happen.

Here are 11 types of property you should never buy overseas…

1. Timeshare Or Fractional Ownership

While timeshares aren’t exactly scams, they are one of the worst overseas property investment types out there.

Their reputation is so bad that about a decade ago, the timeshare industry rebranded itself as “fractional ownership,” but the situation remains the same.

The sales pitch is: You buy a share in a property, which entitles you to use that property for a set period of time every year.

It can seem like an appealing idea at first. However, there are many problems involved in these deals:

1. If you buy two weeks’ use of the property (1/26th of the annual use of the property) you will pay much more than 1/26th of the value of the property. The timeshare developer keeps the extra money.
2. You can’t stay in your property for free because there are usually exorbitant “cleaning and maintenance fees” to be paid every year. (The timeshare manager keeps most of these.) These fees are often nearly as much as it would cost you to rent the timeshare for the two weeks if you didn’t own it.
3. You are committed to using the same property at the same time every year, unless you can find someone else with a timeshare in a place you like with whom you can swap your occupancy time.

Timeshares are a lose-lose scenario.

Instead of buying a timeshare, find a property where the down payment costs the same as your timeshare, get bank financing, and …

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