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Should I invest in real estate overseas?

May 11, 2013: 6:30 AM ET

What are the advantages and disadvantages of real estate investments overseas? —DANIEL L., New York City

Direct investment in foreign property, be it a mall or a second home, is a risky proposition. Sure, you could nab greater gains than in the U.S., should you be smart, knowledgeable, and lucky. But noncitizens can face extra expenses and red tape, and back in the U.S., you're subject to complex investment rules, warns Rapid City, S.D., real estate broker and financial planner Rick Kahler. A safer bet is a fund with global real estate holdings. Try SPDR DJ International Real Estate (RWX), a MONEY 70 ETF; it returned 39% in 2012, compared with 18% for U.S. REITs, though five-year results lagged. Keep foreign holdings at half or less of your real estate allocation, which itself should be at most 8% of your portfolio, says Miami planner Jorge Padilla.

—Lauren Gensler

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Posted in: Investing, Real Estate, Taxes
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    We currently have 10 years and eight months left on a 15-year mortgage at an interest rate of 5.125%, with a balance of $210,362. Is it smart to refinance now with a 10-year note at approximately 3% and cut eight months off the mortgage? —Angela P.

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    Our daughter is building a new home with an in-law suite for us. I am 72 and my wife is 68. We plan to sell our present home and contribute $300,000 of the proceeds to live in this in-law suite. Is there a tax liability for our daughter or us? Also, since we plan to live out our lives in this arrangement, would this contribution be an estate asset for MORE

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