Читать книгу Buying Real Estate Overseas For Cash Flow (And A Better Life) - Kathleen Peddicord - Страница 46

That said, when investing in real estate that trades hands in something other than your base currency, you need to be prepared for the potential consequences. If timing is on your side, a fluctuating currency exchange rate can boost your total home currency return. If not, it can erode it.

We have had both experiences over the 25 years we've been investing in real estate overseas. We invested once in a hard money loan with (that is, we lent money to) a developer in Australia who was offering an annualized return of 12% for an 18-month term. When we made the investment, the U.S. dollar was strong against the Aussie dollar. Over the course of the 18 months that we held the investment, the U.S. dollar weakened. As a result, after the loan had been repaid, our total return in U.S. dollar terms was 12% plus an additional 30%, thanks to the currency movement. Nice surprise upside, right?

On the other hand, when we invested in Medellín, Colombia, in 2011, the Colombian peso was at an historic high against the U.S. dollar. Today, the situation is reversed. While our apartment in that city is worth more than three times what we paid for it in peso terms, it's worth about twice as much in dollar terms. That matters, though, only if we sell and convert the resulting pesos into dollars. We have no need to sell and so continue watching the property's value appreciate while waiting for the peso to rebound.

Market values move up and down. Currency exchange rates fluctuate in cycles. Cash flow carries you through, meaning that cash-flow math is the key to success.