Investment strategies before moving overseas

Investing to cover living expenses while living overseas can indeed be approached in several ways, each with its own set of advantages and considerations.

1. Real Estate Investment:
Investing in real estate can provide a steady income through rental yields and potential capital gains. However, as you mentioned, it involves numerous variables such as property management, maintenance costs, and fluctuating real estate markets. Additionally, tax implications for non-residents can be complex, and it’s essential to consult with a tax professional to understand the specific impacts on your situation.

2. Dividend Stocks:
Investing in fully franked dividend stocks can be an attractive option, especially for covering living expenses through regular income streams. Australian stocks are particularly appealing due to the high dividend yields and franking credits, which can offset some of the tax liabilities. However, as a non-resident, the tax treatment of dividends and franking credits may differ. Typically, non-residents are subject to withholding tax on dividends, and the benefit of franking credits can be less advantageous compared to Australian residents.

3. Global Equities and Diversification:
While focusing on Australian dividend stocks might seem appealing, it’s also worth considering a diversified portfolio that includes global equities. This approach can help spread risk and tap into growth opportunities in different markets. International stocks might not offer the same level of dividend yield as Australian stocks, but they can provide capital growth and potential dividends from a broader range of industries and economies.

4. Bonds and Fixed Income:
For a more conservative approach, especially if you prioritize stability and lower risk, bonds and other fixed-income investments can be suitable. They provide regular interest payments and are generally less volatile than stocks. You can conside

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Hey Lucas.

There’s no one best option because it depends on lots of different things, far too many to mention here.

Here’s something to consider…

Real estate can be powerful due to leverage, but in most places of Australia unless you have a gigantic deposit (30%+) you are typically still going to be out of pocket each month to cover the mortgage repayments. Especially right now as interest rates are up and yields (after costs) aren’t all that attractive.

If you don’t mind this, then real estate might work well for you.

Shares don’t come with the above issues, and no expenses or admin to worry about. But to make the most of this asset class its often best if you can add to the portfolio over time, even by small amounts. Either way this will be more of a hassle free option, even if the upside isn’t quite as high due to no leverage being used.