Real Estate Investors Turn Focus Overseas

"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.

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.

Damberger and Londres -- she's 37; he's 39 -- used a firm they found on the Web, London-based Bulgarian Properties Ltd., to locate a studio in a new resort being built in Bulgaria's Pirin Mountains. They hired a local attorney to ensure all the title work was accurate and to help open a local bank account.When the resort opens next spring, the couple plans to begin generating rental income through a property-management firm that will lease the studio to vacationers.

The cash will be directly deposited into their Bulgarian bank account, and any bills will be directly debited. Any local taxes due will be handled by the property firm.Their ultimate goal: to sell the studio when Bulgaria, which joined the European Union in January, begins using the euro in 2010. That, Damberger says, "should drive the property prices higher" as Western Europeans look east toward cheaper markets for second homes and investment opportunities." read more

By Jeff D. Opdyke, The Wall Street Journal