Don't keep all your eggs in one basket. Heard that one before, right? This well known investment maxim makes perfect sense to the average South African small investor. Even the simplest portfolio invariably consists of various asset classes.

In addition, many small investors also go a step further, making offshore investments to reduce their risk even further. If we readily accept the wisdom of making some of our investments overseas, why then is investing in overseas property still such a novelty?

A lot of South Africans are still under the impression that our property is very cheap when compared to most other markets, says Andre de Villiers of Chas Everitt Overseas Properties. It just isn't so anymore.

While many potential overseas property investors don't realise they are able to afford such an investment, to most the option just hasn't occurred to them. But the times they are a-changin' as the recent launch of Chas Everitt Overseas Properties, the first company of its kind in South Africa, suggests.

"Our research shows that there are now many South African investors that are very keen to pursue real estate opportunities in other countries," says Berry Everitt, Managing Director of the Chas Everitt International Properties.

This increasing interest is also fuelled by the slowing of the local market and the fact that many local home owners have built up substantial equity in their own homes during the last property boom.

"Another reason for the recent interest in overseas property is that our own boom gave many South Africans an appetite for property investment, which they are now looking to satisfy beyond our borders — much as those who invest in equities have become accustomed to doing," says Everitt.

Why invest in overseas property?

Buying an overseas property is an excellent way to protect yourself against economic and political uncertainty as well as the devaluing rand. It also makes good investment sense to tap into booming markets.

"In markets like Brazil and India the increase in local buying power and an emerging middle class is propping up their property markets," says De Villiers. "As more people get access to mortgages this trend will accelerate."

In certain countries, like Brazil and Mauritius, buying a property automatically gives you residency — an overriding factor for about 10 percent of investors.

Where should you buy?

This is a tricky one. Everyone thinking about investing in overseas property will have different reasons for doing so. Often there are vastly different opinions about which markets are hot and which are not. It is therefore important to thoroughly size up the source of any information in this regard. Do they have any interest in the markets they are "talking up"?

Property in emerging countries usually offers better value than those in developed ones. For example, R80 000 will get you a small, rickety house in rural Romania. Property in emerging markets may be cheap, but can be risky. As with any investment taking on more risk can mean a greater reward. Assess your appetite for risk and invest accordingly.

Eastern Europe shows great promise as do countries as diverse as Morocco, Brazil, Mauritius and the Dominican Republic.

The UK's Channel 4 has a property programme that recently compiled a list of the 20 best places to buy a property abroad for investment purposes (considering only projected return on investment). They were Romania, Poland, Portugal, the Baltic States (Latvia, Lithuania, and Estonia), Sweden, Belgium, Slovakia, Finland, Hungary, Luxembourg, Germany, Czech Republic, Ireland, Austria, Netherlands, France, Italy, Spain and Cyprus.

According to Everitt, his pick would be one of the "new" markets that offer excellent opportunities such as Brazil, Argentina, selected Caribbean countries and countries in Eastern Europe. Everitt also believes that certain African countries deserve attention including Egypt, Morocco and Mauritius.

"In the Dominican Republic you don't pay capital gains tax, you get residence and often the developers can provide financing," says De Villiers. "Another major advantage of this market is that we can give you rental guarantees. Dubai has many similar advantages as does Egypt, Cyprus, Bulgaria and Brazil, where 60 percent of Chas Everitt's focus lies."

Article continues on page two: Who can afford to buy abroad?  When should you buy?  Buying to let?