Achieve better returns from international property investments

When considering an overseas property purchase, whether as an investment or a new home, it’s essential to understand the impact of currency exchange. The process of buying and selling property often takes several months, adding to the stress involved. To ensure you get the best return on your international property purchase and maintain control over the process, a solid grasp of the currency market and the tools at your disposal is crucial. Here we provide valuable insights and explains various currency transfer options to help you make the most of your money.

Efficient currency exchange management is vital for international property transactions. For first-time buyers, this can be particularly challenging. Exchange rates fluctuate constantly, with some currency pairs experiencing shifts of up to 5% within a few weeks. Understanding these fluctuations and knowing how to mitigate their impact can make a significant difference in your overall investment. By leveraging the expertise of currency exchange specialists like TorFX, you can navigate the complexities of the currency market, ensuring a smoother and more profitable property purchase abroad.

Exchange rate movements can have a significant impact on an international currency transfer – particularly if you’re transferring the size sums involved in a typical property purchase or sale.  

To illustrate, let’s see how much difference a seemingly small variation in the exchange rate can have on a $550,000 AUD/NZD currency transfer:  

• In February 2024 AUD/NZD was trading at $1.05, so $550,000 would have been worth = NZ$577,500
• By May 2024 AUD/NZD was trading at $1.10, so $550,000 would have been worth = NZ$605,000
• That’s massive! A difference of NZ$27,500 in just three months.

Need to move money now?  

If you need to make a currency transfer immediately a spot contract is the service for you.  When using a spot contract you’ll be offered a competitive exchange rate based on the live rate available at the time. 

A spot contract ensures a swift turnaround, typically within 24-48 hours for ‘standard’ currencies and slightly longer for ‘exotic’ ones. If you have funds on account the transfer can even take place the same day.

Spot contracts are perfect for all sorts of property related international payments, as well as when you’re moving funds for other reasons like emigration, luxury purchases and living costs. They can be conveniently booked online, offline, or via the TorFX app. 

Want to secure the current rate?  

Stability amidst fluctuating exchange rates is crucial for international property buyers, and forward contracts provide just that.  

A forward contract allows you to lock in the current exchange rate for a future date. By paying a deposit to secure this rate, you can be certain of the value of your currency when you make the full transfer, protecting yourself from any potential deterioration in the exchange rate.

However, it’s important to remember that while this approach safeguards you against negative market movements, it also means you won’t benefit if the exchange rate improves.

Forward contracts are particularly useful when purchasing international property, as they help you budget more effectively. They are also beneficial for larger currency transfers for other purposes, such as repatriating overseas assets or transferring emigration funds.

Want to target an exchange rate?  

Taking advantage of a great exchange rate for an international property purchase is made effortless with limit orders.  

With a limit order you set your target exchange rate, being the ideal rate you’d like to achieve for your currency transfer, above current levels.  

If your target rate is reached your transfer will be triggered automatically, without you having to do a thing. If your limit order expires without your rate having been hit, you’ll be notified and you can set a new one.  

Rate alerts also enable you to target rates stronger than the current market level. With a rate alert you set your target rates and receive timely notifications if your rate is achieved via SMS or email, but it’s up to you if you want to take action. You can arrange your transfer off the back of the market moving to your desired rate, or you can set another rate alert to target one even stronger.  

Need to buy currency in advance?  

Digital currency wallets allow you can purchase currency whenever you like the look of the exchange rate and securely store it until needed.  

You can move money between currency wallets and send payments to recipients in a couple of clicks (if arranging your transfers online or via the TorFX app).  

Want to know how exchange rates are performing?  

Ultimately, efficient currency exchange management, highlighted by TorFX, is essential for maximising returns in international property investments. With tailored solutions like spot and forward contracts, investors can navigate exchange rate fluctuations both closely and effectively, ensuring optimal returns and seamless transactions in the global property market.

By leveraging TorFX’s comprehensive array of currency transfer solutions, and easy to use digital options, you can navigate property transactions with ease and get a better return for your international payments.