Secure your children’s future with an offshore property investment
Many South African parents are looking offshore to secure a strong financial legacy for their children. We highlight our pick of the best offshore property investment options currently on offer for South Africans.
Richard Haller ● Jul 24, 2024
Why choose offshore property for your children's inheritance?
Diversifying your assets and building revenue in a stable, hard currency can safeguard your children’s future. If you're planning to send your children to an overseas university or spend significant time abroad, investing in an offshore property that generates a hard currency revenue stream is essential. This approach shields you from exchange rate fluctuations and provides a stable financial base, says Richard Haller, Managing Director for Sable’s Real Estate and Investment Migration division
Investing in offshore assets, particularly in first-world countries with stable currencies, ensures that your legacy is not just protected but grows. Building a portfolio of two to three properties with decent yields (4-6% in hard currency) that also offer capital growth potential can create a solid financial foundation for your heirs, he adds
What types of property investments should you consider?
- Property selection: Focus on location, supply and demand, tenant demand, and capital growth potential. Key questions include occupancy rates, rental yields, and overall investment return.
- New developments: Invest in areas with good amenities and regeneration projects, particularly in the UK. These areas offer decent capital growth and a reasonable chance of finding tenants.
- High-yield investments: Consider properties with mixed-use potential (e.g., a shop with apartments). These may offer higher yields (8-10%) but lower capital growth.
- Offshore trusts and pension funds: These structures offer tax advantages and inheritance benefits. They are ideal for wealth generation and protection.
Top investment locations for 2024
- The UK: With an undersupply of housing and numerous regeneration projects, the UK offers good returns and a low entry point, with small flats available for around £130,000, yielding 6-7%.
- Switzerland: The worlds most stable economy coupled with the formidable Swiss Franc offers a rare and unique opportunity to own exceptional property with yields up to 5%
- Mauritius: Known for solid capital growth and business-friendly policies, an investment of $375,000 with yields around 4% - 5%, also secures permanent residency.
- Greece: Starting at €250,000, Greece offers real estate investments from a low base so good potential for yield and capital growth, with the added benefit of the Golden Visa for you and your family.
Mitigating risks
Investing offshore comes with risks, including legal complexities and potential fraud. To mitigate these, partner with trusted advisers who understand the legalities and market dynamics of the chosen jurisdiction. Ensure that you comprehend the laws regarding non-resident ownership and foreign investments.
By making informed decisions and working with knowledgeable partners, you can build a robust offshore investment portfolio that secures a prosperous future for your children.