If there could be only one rule of investing it would be diversify - and then diversify some more. That typically means buying a mix of domestic and global stocks and bonds, but more adventurous investors have found another way to broaden their asset mix: investing in global real estate.
Buying homes and condos in the right markets - those that are still growing, are popular with international visitors interested in renting and have a thriving local culture - can be a good way to keep a portfolio afloat during downturns, said Ashley Osborne, a Hong Kong-based executive director of international properties for Colliers International.
Housing price fluctuations can be relatively immune to global market movements. Prices depend more on local factors, such as supply and demand for properties and rentals, the country or city's economic growth, local consumer spending and more, Osborne said.
Certain locales also offer much higher yields in the form of rental income profits than bonds, said Yolande Barnes, director of residential research for Savills, a London-based property research firm.
The best places to buy are in international cities that attract a lot of foreigners such as New York or Japan, said Barnes. Investors should also look at places where demand for housing is high, but supply is low and consider areas where rents grow year-after-year.
Some people like buying investment properties purely for the capital gains potential, said Osborne, but be careful: the higher housing prices get the lower the annual yield. If you don't need the rental income and can easily pay the mortgage, then playing the capital appreciation game can work, he said. If you want a regular income, though, then avoid 'hot' markets.
So where are the best places to buy a rental property? Which cities or regions should you avoid? (Thinkstock)