Real-Estate Investors Head Overseas; As the U.S. Property Market Cools Off, Americans Start to Look At Foreign Properties and Funds; Buying a Condo in Bulgaria
Investing in real estate once meant owning rental property downtown or buying shares in a U.S.-based real-estate investment trust. Today, it increasingly means putting money in a REIT trading in Singapore or buying a pied-a-terre in a refurbished medieval village in northern Italy.</br></br>These days, real-estate investing is a international proposition. Nearly a score of global real-estate mutual funds have launched in the U.S. in the past two years, more than doubling in number. They now manage some $16.8 billion collectively, with more than $5.8 billion in new money flowing in this year alone, according to investment researchers Morningstar Inc.</br></br>Earlier this month, the American Stock Exchange listed its second international real-estate exchange-traded fund in the last six months, the WisdomTree International Real Estate fund. And last summer, private bank Northern Trust Corp. launched the first international real-estate index fund, Northern Global Real Estate Index, which now has more than $1 billion in assets.</br></br>Not content with owning real estate through the stock market, some Americans are venturing abroad to buy properties, especially in lower- cost markets such as Brazil, Morocco and Portugal. They then turn them over to property-management firms to generate income.</br></br>That's what Beth Damberger and her husband, Orlando Londres, are doing. Instead of investing in stocks and bonds, the Vallejo, Calif., couple, who own a pet-care business, in the past year have put their investment dollars into a villa in southern France, a beachfront apartment in Brazil and a studio in a Bulgarian ski resort. They hope to one day move to France with their two young children, but for now are renting the villa to vacationers to cover the mortgage payments. The apartments in Brazil and Bulgaria -- each of which cost about $60,000 -- "are purely investments," says Ms. Damberger.